B

ank Indonesia (BI) has predicted that the government’s plan to increase the price for 900 VA-category electricity will contribute between 0.8 and 1.1 percent to inflation next year.

BI governor Agus Martowardojo warned the government to be careful in deciding the ideal time for raising the electricity price. He further said the central bank and the government would soon discuss inflation at a roundtable policy dialogue.

“I predict the electricity price hike will contribute around 0.8 to 1.1 percent to Indonesia’s inflation in 2017. In general, however, it will be still be in line with our inflation target of between 3 to 5 percent,” Agus said in Jakarta on Friday.

After the electricity price adjustment, users of 900 VA electricity would pay Rp 1,400 (10 US cents) per kilowatt per hour (kwh), more than twice the current subsidized rate of Rp 604 per kwh.

The government has argued only 4.1 million out of 22.9 million 900 VA customers deserve to get electricity subsidies.