BI proposes LPG and electricity tariff hike

JAKARTA. Bank Indonesia has proposed a rise in the prices of liquefied petroleum gas (LPG) in 3-kg cylinders and electricity tariffs in 2016 instead of 2017, citing low inflation rate as a reason.

The low inflation rate has opened a room for the government to raise the prices of LPG in 3-kg cylinders and electricity tariffs this year, Deputy Director of the Bank Indonesia Monetary Economic Policy Department Noor Yudanto said in a statement released on Tuesday.

"The prices can be raised this year when the inflation rate is low. But it is fully up to the government to do so by involving the DPR (the House of Representatives)," he said.

The increase in the prices of LPG in 3-kg cylinders and electricity tariffs will contribute 0.8 percent to the inflation rate, he said.

BI has come up with the proposal as it acts a regulator in the monetary field and that it is obliged to give inputs to the government particularly with regard to the government-administered prices, he said.

"The proposal is also aimed at preventing price hike from burdening the public," he said.

The Central Statistics Agency (BPS) said earlier the year-to-date inflation rate stood at 1.97 percent in September 2016.