PLN Indonesia to cut oil-based fuel use 19% in 2007

PLN Indonesia to cut oil-based fuel use 19% in 2007

PT Perusahaan Listrik Negara, Indonesia’s state power utility, plans to cut the use of oil-based fuel by 19 percent next year, replacing it with coal and gas to reduce costs.

PLN may burn 7.49 million kiloliters of oil products in 2007 compared with 9.2 million kiloliters this year, Djuanda Nugraha Ibrahim, acting president director of PLN, told a panel at the House of Representatives in Jakarta on Monday.

The government is promoting the use of coal and natural gas as crude prices soar. The state audit agency said PLN should get Rp 10.2 trillion (US$1.1 billion) of additional electricity subsidies this year to cover rising costs without a power-rate increase.

PLN may spend Rp 43.5 trillion on diesel and fuel oil next year, 13 percent less than Rp 50.3 trillion this year, based on estimated prices given by Djuanda on Monday.

PLN’s total spending on coal, gas, and oil-based fuels may fall 4.2 percent next year to Rp 59.1 trillion as it buys more gas and coal.

Three coal-fired power plants in Java, with a capacity of 2660 megawatts, are expected to come into operation later this year.

Source: Bloomberg

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