Bye-Bye Indonesian Coal Benchmark Price US$ 70 Per Ton

Jakarta, CNBC Indonesia – The government in this case the Ministry of Energy and Mineral Resources (ESDM) will immediately release the price of coal again to the market mechanism. So far, the price of coal for power plants owned by PT PLN (Persero) is set at a special price of US$ 70 per ton.

The release of coal prices to the market mechanism is in line with the formation of a Coal Special Entity or Public Service Agency (BLU) for coal fees which is targeted to be formed in July 2022.

Later, when the domestic coal price is released to the market mechanism, the BLU Coal fee will collect the difference between the market price of coal and the price pegged at US$ 70 by PLN. Later, even though PLN buys coal prices with a market mechanism, there will be compensation from coal companies that will be collected by the BLU.

Special Staff of the Minister of Energy and Mineral Resources for the Acceleration of Mineral and Coal Governance, Irwandy Arif, said that currently the formation of the Coal Fee BLU is in process. “It is said that the target is this July (2022),” he told CNBC Indonesia, Tuesday (28/6/2022).

Irwandy said, if the coal BLU has been formed, then all coal prices will apply in accordance with the business provisions that refer to certain indexes.

“And then to PLN which is US$ 70 per ton, the difference after the index price will be returned to the company. So the company gets the market value of coal,” said Irwandy.

According to Irwandy, the formation of the Coal BLU and the release of coal prices to the market mechanism will better ensure the domestic demand for coal, especially for PLN’s power plants.

Previously, in early January 2022, Indonesia had experienced a coal supply crisis. This is because coal producers prefer to export their coal rather than domestically, which is cheaper or pegged at US$ 70 per ton.

“Hopefully the new system can overcome this,” said Irwandy.

[Gambas:Video CNBC]

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