Airlangga: Electricity Tariff Discount Will Not Be Extended

JAKARTA, investortrust.id – Coordinating Minister for Economic Affairs Airlangga Hartarto has confirmed that the 50% electricity tariff discount for poor households will not be extended beyond its initial January–February 2025 period.

“No,” Airlangga stated at his office in Jakarta on Monday, Feb. 3, 2025, anwering reporters question wether the the 50% electricity tariff discount for households consuming less than 2,200 volt-amperes (VA) would extend beyond February this year. 

Previously, Indonesia’s Central Statistics Agency (BPS) reported a 0.76% month-on-month and calendar-year deflation for January 2025. The decline was attributed to a drop in the Consumer Price Index (CPI) from 106.8 in December 2024 to 105.99 in January 2025.

Acting BPS Head Amalia Adininggar Widyasanti noted that the January 2025 deflation was the first since September 2024. The inflation was also the lowest since March 2000. 

The most significant contributors to inflation were the housing, water, electricity, and household fuel sectors. However, this segment recorded a 9.16% month-on-month deflation, contributing 1.44 percentage points to the overall deflation rate. Electricity tariffs played a major role, accounting for a 1.47 percentage point contribution to deflation.

“Other commodities that contributed to deflation include tomatoes (0.03 percentage points), while cucumbers, train fares, and airline tickets each contributed 0.01 percentage points,” Amalia said at the BPS headquarters in Jakarta on Monday, Feb 3, 2025.

BPS explained that the government's two-month 50% electricity discount significantly influenced January’s deflation, contributing 32.03% to the overall decline, with a 1.47 percentage point impact on the monthly deflation rate. “This deflation was driven by the 50% discount for electricity customers,” Amalia stated.

She added that similar electricity tariff-induced deflation was recorded in July and August 2022 following a tariff adjustment in Q3 2022, as stipulated in the Energy and Mineral Resources Minister’s Letter No. T-162/TL.04/MEM.I/2022, issued on June 2, 2022.

According to Amalia, BPS calculates discounts based on guidelines from the Consumer Price Index Manual, which is used by statistical agencies worldwide for CPI assessments. “Discounts are factored into inflation calculations only if the quality of goods and services remains unchanged and the discounted prices are broadly accessible,” she explained.