Indonesian Textile Association (API) chairman Ade Sudrajat said in Jakarta Monday that PLN should have first talked to related industries before introducing the new tariff.
“We haven’t had a dialogue with PLN about this policy. The hike in the tariff will slow down the growth of the industrial sector in general,” he told The Jakarta Post on Monday.
PLN denied that there was a new tariff increase. The company, however, acknowledged that its customers had to pay a higher tariff beginning January because of the removal of the tariff cap by PLN last year.
The Energy and Mineral Resources Ministry raised the tariff for industries by between 20 percent and 30 percent in July, 2010. However, due to massive protests from businesspeople, the government, the House of Representatives and PLN later agreed to cap the rate hike at 18 percent starting July 2010. PLN claims that based on the agreement, the cap would be revoked in January 2011, which means that business owners would face rate hikes of between 2 and 22 percent.
API chairman Ade said that if PLN lifted the cap, textile industry businesses would experience an average 23 percent hike in electricity supply costs, adding that increased production costs would lead to more expensive and less competitive prices.
Indonesian Businessmen Association (Apindo) deputy secretary general Franky Sibarani told the Post that businessmen would ask PLN to review the policy and maintain the cap for the sake of the industrial sector’s future.
“We will meet with PLN’s board of directors this week to discuss the matter. We hope the company will keep the 18 percent cap. Regarding when the cap can be lifted, we’ll also discuss that later,” he said.
PLN spokesperson Bambang Dwiyanto said that since December last year the company had directly informed all business customers about the plan to revoke the tariff cap. However, he declined to comment when asked about how businessmen responded to the information.
“We only lifted the cap, but are not raising the tariffs. We implemented the ministerial decree without discrimination,” he said, adding that currently only a select few industries were covered by the cap, while the majority had to pay in accordance with the ministerial decree.
He promised that there would be no electricity rate hikes in 2011.
Legislators at the House of Representatives also guaranteed that PLN would have no room to raise power tariffs this year because the 2011 State Revenues and Expenditures Budget had mandated keeping the tariffs at the current rate.
Golkar party legislator Satya W. Yudha said that if the government decided to raise the electricity tariffs, he believed that the government would fail to achieve the economic growth target of between 7 and 8 percent this year.
United Development Party (PPP) legislator M. Romahurmuzy reminded that another electricity tariff hike for industry might lead to massive layoffs across the country because businessmen would not be able to deal with soaring production costs