Another cascading benefit is that the program will increase domestic production of electric stoves and absorb 1,500 workers for every 10 million electric stove conversions. The massive needs for electric stoves will be a boon to local producers, on the condition that dependence on imported raw materials is reduced. Subsequently, it will create a new business ecosystem, for example production of cooking utensils (pots and pans) which are more suitable for electric stoves, and other related supply chains.
The key to success
Despite the many positive impacts above, the public remains skeptical of the program. Many argue whether it is feasible for poor households with only 450 VA and 900 VA power to use electric stoves. Many are even suspicious that the Government is “trapping” the ordinary folks to use electric stoves before raising the electricity rates? And there are many more questions on technical and non-technical aspects.
To ensure the success of the program, the Government needs to do some more homework. First, the policy must be based on a common understanding and consensus from various stakeholders that the ultimate goal is to gradually reduce the volume of subsidized LPG. This means that the conversion policy must be integrated with the LPG subsidy policy and implemented consistently. The budget for the procurement of electric stoves and subsidized electricity tariffs for cooking will have to be diverted from the 3-kg LPG subsidy spending. And the quota for subsidized 3-kg LPG cylinders must also be reduced, especially in regions targeted for conversion.
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Second, the program needs to be widely accepted and supported by the community. One of the incentives that attract people to make a switch is the affordable electricity tariff for cooking. So far, people are still wondering and anxious whether the electricity tariff they will pay later will still be subsidized. This is a reasonable concern. With the current subsidized tariff, consumers in the 450 VA category only need to pay Rp415 per kWh while those in the 900 VA category Rp946 per Kwh. Meanwhile, to use an electric stove the minimal power requirement is 2,200 VA which costs Rp1,444 per kWh, three times higher than the subsidy rate. Of course, the additional electricity bill will place a greater burden on poor households. Therefore, the Government needs to provide certainty about subsidized electricity tariffs, through a ministerial regulation.
Third, the electricity conversion program must also be followed by intensive public education and a communication campaign. This is because the use of electric stoves is a new thing for most people, so there needs to be a complaint channel and prompt handling should problems related to electric stoves emerge. For example, when a unit is damaged, is there a mechanism to report and exchange the stoves? Hopefully, if these matters are carried out seriously and consistently, the public will become more accepting, going forward. (Abra Talattov)