Indonesia’s electricity-tariff formula has called for a rate increase in three consecutive quarters of 2026. The government has overruled it three times running, and a fourth override looks likely before the year is out — which means a Jakarta office tower, a Surabaya factory floor, or a Bandung retail block that budgeted around today’s power bill may be sitting on a cost the state has deferred, not cancelled.

What ESDM Decided, Quarter by Quarter

Indonesia’s Ministry of Energy and Mineral Resources (ESDM) is required under Ministerial Regulation (Permen ESDM) No. 7 of 2024 to review electricity tariffs for PLN’s (Perusahaan Listrik Negara, the state-owned electricity utility) non-subsidized customers every three months, using four inputs: the rupiah-to-dollar exchange rate, the Indonesian Crude Price (ICP), inflation, and the government’s benchmark coal reference price, known as the Harga Batubara Acuan (HBA).

In each of the first three quarters of 2026, that formula pointed toward an increase. In each case, the government froze rates instead. On April 3, 2026, the ministry held Q2 rates flat using a calculation window showing ICP at $62.78 a barrel, according to Petromindo. On June 30, 2026, it did the same for Q3 — this time with ICP having risen to $96.12 a barrel, a roughly 53 percent jump in the benchmark the formula runs on — according to InvestorTrust.id. Energy Minister Bahlil Lahadalia told reporters at the Presidential Palace complex on October 5, 2026, that Q4 rates would “probably” not rise either, though he said the formal decree was still being finalized, according to CNBC Indonesia. As of October 19, 2026, PLN’s published tariff table for the week of October 19–25 was still running on the unchanged Q3 schedule, with no Q4 decree yet issued, according to Metrotvnews.

The Number the Formula Wanted

A 53 percent jump in ICP between the windows used for Q2 and Q3 should have moved the formula’s output substantially. Instead, the tariff a factory or office building actually pays has not changed since the start of the year. For the largest industrial users — I-4, the category for sites drawing 30,000 kVA or more — the rate has held near Rp 997 per kilowatt-hour through the freeze. For mid-sized commercial users above 200 kVA, the B-3 category, it has held near Rp 1,122 per kWh, according to CNBC Indonesia’s reporting of the Q3 schedule.

One input barely moved at all. The HBA, the coal reference price built into the formula, stayed pinned at $70 a ton across both the Q2 and Q3 calculations, according to InvestorTrust.id, which ties that flat figure to Indonesia’s Domestic Market Obligation (DMO) — a policy requiring coal producers to set aside a share of output for the domestic market, including PLN’s power plants, at a government-set reference price rather than the export price. That keeps roughly half the formula’s inputs politically fixed before the other half — the exchange rate, inflation, and the internationally priced ICP — are even calculated.

Why the Freeze Isn’t Free

Each freeze has been announced in near-identical language: protecting public purchasing power, preserving economic stability, and giving businesses certainty. That reasoning explains why the government keeps overruling its own formula, but it does not make the underlying cost disappear. PLN still has to buy fuel, pay independent power producers, and service the debt on new generation capacity at prices that a $70-a-ton coal input alone would not cover if that price simply reflected the export market. Someone is absorbing the gap between what the formula says PLN should be charging and what it is actually charging — either PLN’s own balance sheet, a compensation payment from the state budget, or some mix of both.

That arrangement has now held for three quarters. It is a political choice, not a structural one, and political choices can reverse faster than a facilities budget can.

What a Building Owner Should Model Before the Freeze Breaks

A three-quarter freeze set against a formula that keeps pointing the other way is not evidence the formula no longer matters. It is evidence of a widening gap between what the tariff would be and what it is. Three practical steps follow for anyone running a commercial or industrial site on a B-2, B-3, I-3, or I-4 meter:

  • Track the ICP and HBA inputs each quarter, not just the published tariff — a widening gap between those inputs and a frozen rate is the leading indicator of a catch-up increase, and it is public data months before any ESDM decree.
  • Stress-test the facility’s annual energy budget against a scenario where the accumulated formula gap is applied in a single adjustment, rather than treating the current freeze as the new baseline.
  • Treat efficiency and demand-side investment, not rate forecasting, as the lever actually within a building owner’s control, since neither PLN nor ESDM has signaled how or when a multi-quarter gap gets closed.

Key takeaways

  • Indonesia’s ESDM has frozen non-subsidized electricity tariffs for three consecutive quarters of 2026 even though its own Permen ESDM No. 7/2024 formula pointed toward an increase each time.
  • The Indonesian Crude Price input rose roughly 53 percent between the calculation windows used for Q2 and Q3 2026, while the coal reference price stayed fixed at $70 a ton under the Domestic Market Obligation policy.
  • As of October 19, 2026, PLN’s published tariff table was still unchanged from the prior quarter, and no Q4 decree had been issued despite Minister Bahlil Lahadalia’s October 5 signal that rates would likely hold again.
  • Mid-sized commercial users in the B-3 category have paid roughly Rp 1,122 per kWh through the freeze; large industrial users in the I-4 category have paid roughly Rp 997 per kWh.
  • A multi-quarter freeze defers cost rather than eliminating it, and a building or portfolio budget built on today’s rate should account for the possibility of a later catch-up adjustment.