To Mitigate War Impacts, Government Plans to Boost Coal Production

The government is planning to increase national coal production as a measure to anticipate the impact of the war in the Middle East, which has triggered a rise in global energy prices.

Coordinating Minister for the Economy Airlangga Hartarto stated that the government is evaluating an increase in coal production volume in the 2026 Work Plan and Budget (RKAB). This step follows instructions from President Prabowo Subianto during a cabinet meeting on Thursday (19/3/2026).

The increase in coal production is expected to help suppress the risk of surges in Fuel Oil (BBM) prices and other energy commodities due to geopolitical turmoil.

“Therefore, the President also requested that the coal production volume be increased. This means there will be adjustments to the RKAB,” said Airlangga at the State Palace.

In addition to increasing production, the government is also examining coal export tax schemes as one effort to optimise state revenues. With the potential for rising commodity prices, the government hopes to gain additional income from windfall profits in the coal sector.

“The hope is that government revenues will also rise with the windfall profit; there will be an increase in government revenues as well.”

Not only that, Prabowo is also pushing for the acceleration of converting diesel power plants (PLTD) to solar energy-based power plants. This policy aligns with the surge in world crude oil prices, which have breached the US$100 per barrel level.

“The President has directed that this be realised immediately and calculated. Danantara was tasked with resolving the issues with those PLTDs,” he revealed.