Indonesia: 5.11 billion USD expected to spend on electricity subsidy in 2025

June 04, 2024 | 16:58

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Indonesia’s state-owned electricity company (PLN) expects the government will spend 83 trillion IDR (5.11 billion USD) in 2025, an increase of nearly 10 per cent compared to this year, to keep electricity prices stable for consumers.

Indonesia: 5.11 billion USD expected to spend on electricity subsidy in 2025, Illustrative image (Photo: Jakarta Post)

Jakarta – Indonesia’s state-owned electricity company (PLN) expects the government will spend 83 trillion IDR (5.11 billion USD) in 2025, an increase of nearly 10 per cent compared to this year, to keep electricity prices stable for consumers.

PLN General Director Darmawan Prasodjo said the estimate is based on rising oil prices and exchange rate assumptions outlined in next year's draft state budget (RAPBN).

The draft includes an assumption of an inflation rate between 1.5 per cent and 3 per cent. Nearly 65 per cent out of the aforementioned sum, or 54 trillion IDR will be allocated to the household sector comprising 35.22 million customers.

Electricity subsidy spending for the social and corporate sectors is estimated to reach 12.2 trillion IDR and 9.4 trillion IDR, benefiting 2.13 million and 4.29 million customers, respectively. Electricity subsidies for industrial sectors as well as the government and other sectors are estimated to top 5.9 trillion IDR and 1.6 trillion IDR.

Meanwhile, statements from Finance Minister Sri Mulyani and a budget planning document suggest the government may cut energy subsidies and compensation next year. Analysts say that move will create fiscal space for the new administration to pursue new policies.

The government and the House of Representatives are drafting the 2025 state budget which is scheduled to be complete in September.

The draft will be signed right before President Joko Widodo resigns and President-elect Prabowo Subianto takes power this October.

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By VNA

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