Govt to set base price for coal export duty at $50-$55
Govt to set base price for coal export duty at $50-$55
Urip Hudiono
and Leony Aurora
The Jakarta Post/Jakarta
Amid rising criticism from industry players of its recently
imposed 5 percent export duty on coal, the government may
consider taxing it only if the commodity's price rises to between
US$50 and $55 a ton.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said on Saturday after a meeting with Coordinating Minister for
the Economy Aburizal Bakrie and Minister of Trade Mari E.
Pangestu, that the government might not impose the export duty
flatly for all coal exports, but only during certain price
levels.
"We are still discussing at what exact price level the export
duty will be charged; so exporters will not suffer losses from
it, while the government can also increase its revenues," he
said.
"But I would say that a range between US$50 and $55 a ton
would be appropriate, considering how the price of coal is
sometimes above that level. And if the price is below that, we
also understand how the additional duty might affect production
costs."
At present, the free-on-board (FOB) price for coal is hovering
around $40 a ton.
The Ministry of Finance issued a decree on Oct. 11 stipulating
all coal exports be charged a 5 percent rate based on FOB prices.
The new export duty requires the Ministry of Trade to create an
export reference price, in coordination with the Ministry of
Energy and Mineral Resources.
Meanwhile, Aburizal and Mari said that the exact base price
level for the export duty would be determined after further
discussions over the matter with industry players.
The Indonesian Coal Mining Association criticized the export
duty policy, arguing that it could deter investment rather than
achieve its purpose of generating more revenue and securing the
local supply of coal. They suggested that the government apply a
"domestic market obligation" scheme instead.
Indonesia, which produced some 131 million tons of coal last
year, exports some 70 percent of it to Japan, Taiwan, South
Korea, India and China.
Amid rising global coal prices, the association has forecast
the country's coal output to increase by 19 percent to 155
million tons this year, and 12 percent to 175 million next year.
The association also estimated that domestic demand for coal
will, over the next 20 years, increase more than five-fold to 194
million tons per year as the commodity replaces the heavily
subsidized kerosene and diesel fuels.
The energy ministry itself is targeting, in its road map,
increasing coal usage from 11 percent of the total fuels used to
produce energy at present to 38 percent in 2020.