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top ministry official says he is optimistic that the government’s proposal to increase electricity rates would be approved by the House of Representatives despite the deadlock between the two earlier this week.

Deputy Energy and Mineral Resources Minister Rudi Rubiandini said on Wednesday that he was optimistic because the policy would not be applied to users such as small households and small business who used power between 450 to 900 volt-amperes (VA).

“The price increase would only apply to electricity users with power capacity above 900 VA,” he told a media meeting at the ministry’s office on Wednesday.

As previously reported, the government plans to increase the electricity rates between 3 and 4 percent per quarter next year, or by between 12 and 16 percent by the end of 2013.

The plan is aimed at reducing the government’s subsidies for private electricity use.

Rudi said further that in addition to industries, the government would gradually remove electricity subsidy for households that use electricity above 6,600 VA, malls, big supermarkets and governmental institutions.

During a House session last Monday, the government’s proposal on the price adjustment was opposed by several factions, including the Indonesian Democratic Party of Struggle (PDI-P). Deliberation of the plan was postponed until next Monday, Sept. 17.

Separately, Finance Minister Agus Martowardojo said that the rise in the electricity price would have little effect on inflation in the country.

He said if electricity rates were increased according to the plan, inflation might only increase by 0.3 percent, and it would allow the government to increase the amount allocated for capital spending by an additional Rp 7 trillion (US$731.6 million) to a total of Rp 200 trillion for the 2013 state budget.

Meanwhile, state electricity company PLN president director Nur Pamudji said that the planned rate increase was crucial for boosting the company’s investment.

Rudi said that with the increase, PLN could further improve power infrastructure and increase the country’s rate of electrification by bringing power to people in remote areas.