The plan to increase the basic electricity tariff (TDL) for 13 groups of non-subsidized customers next year is suspected to erode the competitiveness of domestic textiles and textile products (TPT). Director of Textile, Leather and Footwear at the Ministry of Industry, Elis Masitoh, said that the increase in TDL will burden the industry because energy costs contribute between 10 and 25 percent of production costs. If detailed, the proportion of energy in the largest production costs is in the upstream and intermediate industries, namely 25 percent and 10 to 15 percent in the downstream industry.

In addition, the textile industry which is integrated with each other from upstream to downstream also causes an increase in TDL which will have a domino effect.

"The increase in electricity costs will increase the price of finished products that will be used by the downstream industry so that the increase in TDL will have a snowball effect downstream," said Elis.

Elis continued, the burden borne by consumers from rising product prices will reduce the competitiveness of local textiles from imported products. In fact, the Ministry of Industry is promoting an import substitution program which is targeted to reach 35 percent by 2022.

Thus, this will also have an impact on the achievement of the import substitution target next year.

 "How will domestic products substitute for imported products if the domestic price is higher due to the increase in TDL," he said.

 Based on the TDL adjustment plan by the Ministry of Energy and Mineral Resources, the increase in class I-3 or electricity usage above 200 kVS and I-4 with power usage above 30,000 kVA is projected to be 15.97 percent and 20.78 percent, respectively.

 Meanwhile, according to data from the Central Statistics Agency (BPS) processed by the Ministry of Industry, the increase will raise the cost of goods manufactured (HPP) for the textile industry by 1.05 percent for groups I-3 and 1.37 percent for groups I-4. As for the apparel industry, the increase in HPP is estimated at 0.34 percent for group I-3 and 0.44 for group I-4.

  Meanwhile, the leather, leather goods and footwear industry will be burdened by an increase in HPP by 0.32 percent for groups I-3 and 0.42 percent for groups I-4. "The increase in TDL will of course be very burdensome for the textile industry because of the weight of energy in the cost structure," said Elis.