According to the API official, the increase in electricity tariff will subsequently raise the cost of production of textile goods and domestic firms would chose to use imported goods as there are no components to reduce the cost of production.
Mr. Sudrajat added that increasing use of imported products would severely affect the competitiveness of the domestic textile firms, which is contrary to the campaign of increasing competitiveness of industries in Indonesia ahead of the integration of the ASEAN Economic Community (AEC) in 2015.
The Indonesian Government would be raising the electricity tariff for industrial units in the country in four phases this year. The tariff for public-listed, large-scale industrial units using more than 200 kilovolt ampere (kVA), known as Group I-3, will be raised by 38.9 percent. The first phase increase of 8.6 percent is scheduled for May 1, 2014.
For the industrial units using more than 30,000 kVA, known as Group I-4, tariff would be increased by 64.7 percent, with the first phase increase of 13.3 percent scheduled for May 1 this year. Following the first hike, the tariff for both the groups would be subsequently increased on July 1, September 1, and November 1, 2014, respectively, unless the Government extends the dates.
Fibre2fashion News Desk - India
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