Electricity Subsidy Increased by 4.87% in the 2020 State Budget

The Ministry of Energy and Mineral Resources (ESDM) proposed an allocation of Rp 62.21 trillion for electricity subsidies in the 2020 State Budget (RAPBN). This calculation uses an assumption of an exchange rate of Rp 14,400/US$ and an Indonesian Crude Price (ICP) of US$ 65/barrel.

This proposal is 4.87% higher than the electricity subsidy allocation in the 2019 State Budget, which was Rp 59.32 trillion. The realization of electricity subsidies up to July 2019 reached Rp 30.89 trillion.

The planned electricity subsidy policy in the 2020 RAPBN is divided into five plans. First, providing electricity subsidies to certain tariff groups. Second, providing targeted electricity subsidies to all 450-volt ampere (VA) household customers and poor and vulnerable 900-VA household customers, based on the Integrated Data of the Poverty Alleviation Program (DTPFM). Third, the government will also increase the national electrification ratio and reduce disparities between regions.

The fourth plan is to improve the efficiency of electricity provision and reduce the composition of fuel oil (BBM) use in power plants. Fifth, to develop more efficient new and renewable energy, and to substitute Diesel Power Plants (PLTD) in isolated areas.

(Read Databoks: [Indonesian Electricity Tariffs Remain Competitive Compared to Other ASEAN Countries](https://databoks.katadata.co.id/datapublish/2019/08/05/tarif-listrik-indonesia-masih-kompetitif-dibandingkan-asean))