The Indonesian government planned to gradually increase electricity tariff next year to cut huge energy subsidy and allow the government to set aside more funds for building infrastructure, a minister said Tuesday.

Energy and Mineral Resources Minister Jero Wacik said that the rise would be applied to the middle to high class consumers, and the hike could be by 4.3 percent in each quarter to ease the impact on inflation.

The electricity prices in Indonesia is the cheapest in southeast Asia.

Indonesia's energy demand rises over 10 percent annually as the country's economy expanded by more than 6 percent since 2010.