The Ministry of Energy and Mineral Resources (ESDM) has resumed the electricity subsidy removal scheme for 900 VA customers. The new adjusted tariff has been in effect since March 1st. The subsidy removal schedule, implemented in three phases, is stipulated in the Minister of ESDM Regulation Number 28 of 2016. This is a PLN initiative to ensure that subsidies are more targeted. The increase is implemented every two months. This time, the tariff has increased from Rp 774 per kWh to Rp 1,023 per kWh, a 32% increase.
In 2016, the realization of electricity subsidies reached Rp 63 trillion, while the government's allocated budget was only Rp 40.7 trillion. Since 2008, the realization of electricity subsidies has almost always exceeded the budgeted amount. Only in 2014 and 2015 was the realization lower than the budget. This is the reason behind the government's decision to reduce subsidies, aiming for more effective targeting.
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