Bahlil May Revise Coal Price for PLN

Jakarta (ANTARA) - Minister of Energy and Mineral Resources Bahlil Lahadalia has the opportunity to revise the coal price for PT PLN (Persero) amid increasing production cost pressures on suppliers and challenges in maintaining medium-calorie coal supply. The price adjustment is being considered to meet domestic market obligation (DMO) needs, which is currently set at USD 70 per tonne for PLN. “We are calculating the pluses and minuses, so that PLN is not disadvantaged, but the entrepreneurs are also not disadvantaged,” Bahlil told reporters at the Office of the Coordinating Ministry for Economic Affairs, Jakarta, Thursday. The Ministry of Energy and Mineral Resources is observing constraints on medium-calorie coal, particularly with specifications around 5,200 kcal per kg GAR required by PLN’s power plants. Meanwhile, production costs at mines have also increased because the stripping ratio for medium-calorie coal is said to be in the range of 8 to 12 percent. “The production costs are already high. So, we also have to be wise so that our entrepreneur friends are not bought at a very cheap price,” he added. According to him, the government needs to maintain a balance between PLN’s interests as the buyer and mining businesses as suppliers. An increase in the coal price for PLN cannot be viewed solely from the burden on electricity costs, but also from the sustainability of supply for power plants. “If they buy at a loss, that is not possible either. Because we also have to protect the entrepreneurs so they do not suffer losses,” he continued. The government is currently calculating policy options, including the possibility of incentives or adjustments to the reference price formula. The minister stressed that the calculations are being made so that PLN is not disadvantaged, while suppliers still have reasonable economics. Amid these discussions, the government has assured that electricity supply remains secure. Bahlil said the coal constraints do not pose a risk of power outages.