Observers Assessing the Pricing of Coal for National Electricity is Realistic

By : Hariyanto And Aldo Bella Putra | Sunday, March 11 2018 - 19:00 IWST

Tambang Batubara (ist)
Tambang Batubara (ist)

INDUSTRY.co.id - Jakarta - Energy economics observer from UGM Fahmy Radhi considers that the government's decision to set the selling price of coal for domestic power plants of US $ 70 per ton is quite realistic.

"The coal price of 70 US dollars per ton is beneficial to both parties, namely PT PLN and coal businessmen," he said in Jakarta, Friday (9/3/2018).

The continued positive impact of coal price fixing of US $ 70 per ton is that the people are not burdened with the increase of electricity tariff until 2019.

According to Fahmy, with coal production cost currently around US $ 35 per ton, the coal businessman still reap the profit up to 100% at the selling price of US $ 70 per ton.

"As for PLN, the purchase price of US $ 70 per ton, can still cover the cost of electricity production, so there is no need to raise electricity tariffs that will burden the people as consumers," he said.

Moreover, he continued, the volume of coal reserved for the power plant is only 25% of the total production. Meanwhile, the remaining 75% of national coal production for export at market price. "It means that the decision of coal selling price of US $ 70 will not harm coal businessman," he said.

Fahmy appreciated the Minister of Energy and Mineral Resources, Ignatius Jonan, who has made the best decision by setting the coal price for the power plant for US $ 70 per ton. "It is not easy to decide the price of equilibrium that does not harm both parties," he said.

ESDM Minister Ignatius Jonan on Friday signed Decree of the Minister of Energy and Mineral Resources No. 1395K / 30 / MEM / 2018 on Coal Prices for Electricity Supply for Public Interest.

In accordance with the new beleid, the government sets the price of coal for domestic power plants at US $ 70 per ton. The coal price of US $ 70 is retroactive from 1 January 2018 to 31 December 2019.

The government sets the maximum volume of coal at a selling price of US $ 70 of 100 million tons per year. The government's decision was taken to prevent electricity tariffs from rising so as to maintain the purchasing power of the people and industry. (Tar)

News Comment

Today's Industry

Vice President Ma’ruf Amin during Closing of National Conference on Public Security and Defense System, at Sentul, West Java province, Friday (18/6). (Photo: Vice President Secretariat)

Minggu, 20 Juni 2021 - 19:24 WIB

VP Calls for Increased Role of Security, Defense System Amid Global Challenges

The role of security and defense system should be strengthened to protect the entire nation, state and all citizens in facing the increasing global challenges, Vice President Ma’ruf Amin has…

Minister of Women Empowerment and Child Protection I Gusti Ayu Bintang Darmawati (Source: PR of Cabinet Secretariat)

Minggu, 20 Juni 2021 - 18:45 WIB

Gov’t Unveils Strategies to Eradicate Child Labor

In a bid to protect children’s rights in Indonesia, Ministry of Women Empowerment and Child Protection has unveiled a number of strategies to eliminate child labor in the country.

Minister of Energy and Mineral Resources Arifin Tasrif. (Photo by: PR of Cabinet Secretariat)

Minggu, 20 Juni 2021 - 17:30 WIB

Gov’t Gears Up to Finalize Regional Energy Plan Next Year

The Government has pushed for the finalization of multi–sectorial energy policies in the form of Provincial Energy General Plan (RUED-P). The RUED-P is expected to be completed next year.

President Jokowi, accompanied by West Java Governor Ridwan Kamil, in Bogor regency from Pakansari Stadium in Cibinong sub-district, West Java province. (Photo: Bureau of Press, Media, and Information of Presidential Secretariat/Lukas)

Minggu, 20 Juni 2021 - 16:15 WIB

President Jokowi Inspects Mass Vaccination for Public and People with Disabilities at Pakansari Stadium

President Joko “Jokowi” Widodo Thursday (17/06) inspected mass vaccination at Pakansari Stadium in Cibinong sub-district, Bogor regency, West Java province.

President Jokowi inspects mass COVID-19 vaccination at Bogor Train Station, West Java (17/06/2021). (Source: YouTube Channel of Presidential Secretariat)

Minggu, 20 Juni 2021 - 15:47 WIB

President Jokowi Calls for Vaccination Acceleration in Areas with High Interaction and Mobility

In a bid to achieve community immunity or herd immunity, the Government is set to boost vaccination, especially in areas with high public interaction and mobility.