YLKI: Tariff Reforms Trigger Inflation

INDUSTRY.co.id - Jakarta - The Indonesian Consumers Foundation says the government's tariff electricity tariff proved to be a trigger for inflation.

"According to the Central Bureau of Statistics in 2017, electricity tariffs contribute the most dominant in the inflation rate of 0.81 percent," said Chief Executive of the Indonesian Consumers Foundation (YLKI) Tulus Abadi via a written message received in Jakarta, Friday (16/2/2018).

In 2014, the governments roll out tariff-based electricity tariff reforms followed by the implementation of targeted electricity subsidies to 900 VA customers.

Later, the government issued a tariff reformulation discourse by including the price of coal reference into the element of electricity tariffs.

According to Tulus, it can be understood if the government can control the price at the national level, not based on international reference prices.

"'Gonjang-ganjing' coal price should not be a discourse to raise the electricity tariff again because it will hit the purchasing power of consumers," he said.

What the government should do, says Tulus, is to intervene on the price of electricity on the upstream side, not downstream.

"It is very unlikely that on the downstream side the electricity tariff is highly regulated, but on the upstream side is very dynamic and liberal," he said.

The government should be able to set the upper and lower limits for domestic coal sales price so that there is a clear benchmark.