Legislator: Coal DMO Transactions Using Rupiah to Mitigate Fiscal Risks

Jakarta (ANTARA) - Member of House Commission VII DPR RI Rokhmat Ardiyan supports the use of the rupiah in transactions for purchasing coal under the Domestic Market Obligation (DMO) scheme for national electricity generation needs, aiming to mitigate fiscal risks arising from fluctuations in global energy prices and foreign exchange rates.

According to him, employing the rupiah in domestic energy transactions will help maintain stability in electricity generation costs while reducing pressure on the state budget, which has previously been affected by exchange rate changes and global energy price dynamics.

“I support transactions using the rupiah, especially for that coal purchase, so that the state does not suffer significant losses,” he stated in his comments in Jakarta on Wednesday.

Rokhmat explained that the coal in question is the DMO supply specifically allocated for domestic electricity generation needs.

Currently, domestic coal purchase transactions are known to be around US$70 per tonne.

With large required volumes, he continued, financial burdens risk surging if the rupiah weakens against the US dollar, hence using the rupiah is deemed to provide cost certainty and minimise exposure to exchange rate fluctuations.

“Since the transactions are conducted domestically, using the rupiah is considered more efficient and logical than using foreign currency,” said the House Budget Agency member.

Regarding President Prabowo Subianto’s instruction emphasising the reduction of diesel-fuelled power plants as part of the national priority programme to enhance energy efficiency, Rokhmat supports this.

He assesses that diesel power plants have relatively high production costs and still rely on imported fuel, therefore reducing their use aligns with efforts to strengthen national energy self-sufficiency.

He added that using the rupiah in DMO coal transactions and reducing diesel power plants represent complementary strategic steps in bolstering national energy resilience.

“Such policies not only reduce financial risks but also support a more efficient and sustainable energy transition,” he said.