Economist deems current moment ideal for implementing coal export duty

Jakarta (ANTARA) -

Energy economics expert from Universitas Gadjah Mada (UGM) Fahmy Radhi considers the current conditions as the right momentum to implement a coal export duty policy, in line with the high global energy commodity prices.

According to him, a rise in world oil prices is usually followed by an increase in mining and mineral commodity prices, including coal. This will benefit exporting countries.

“Every time oil prices rise, it will also raise (prices of) mining commodities and minerals. Because the revenue from those prices is usually linked to world oil prices. So if it rises, then (prices of) coal, nickel, and others will also increase,” said Fahmy in Jakarta on Saturday.

With relatively low production costs, around $40 US per metric tonne, companies still have ample profit margins even if subjected to an export duty.

So far, the absence of an export duty has meant that the biggest benefits from the coal price surge have mostly been enjoyed by business actors.

“When coal prices rise high, the ones who benefit are the entrepreneurs, while the state only receives relatively small revenues from royalties and taxes,” he said.

With the implementation of an export duty, continued Fahmy, the state has the opportunity to gain additional revenues that can support the State Revenue and Expenditure Budget (APBN).