President Jokowi Limits Coal Exports, SOE Minister Erick Thohir: Prioritize Domestic Energy Needs

JAKARTA - President Joko Widodo (Jokowi)'s move to restrict the government from banning coal exports for the period 1 to 31 January 2022 received a response from the Minister of SOEs, Erick Thohir. According to Erick, the government has taken various quick steps to overcome the problem of domestic coal and Liquefied Natural Gas (LNG) supply.

He explained that one of the steps taken was to modernize the logistics system and infrastructure so that Indonesia's capacity as a natural resource-producing country would not experience uncertainty in energy needs to support smooth development.

This was emphasized by the Minister of SOEs, Erick Thohir after holding a meeting with the Minister of Energy and Mineral Resources (ESDM), the Minister of Trade, the Minister of Transportation, the Attorney General's Office, and the Financial and Development Supervisory Agency (BPKP), Monday, January 2.

The meeting between the Ministries and Government Institutions was carried out after the President of the Republic of Indonesia, Joko Widodo, gave a briefing regarding priorities for prioritizing the fulfillment of domestic energy needs before exporting.

"Ministers related to the supply of coal and LNG to support the national electricity supply immediately divide the tasks. We at the Ministry of SOEs will improve the long-term supply contract in accordance with a joint meeting with the Attorney General's Office and BPKP. In essence, domestic energy needs will be much more prioritized for smooth operation. development," explained the Minister of SOEs, Erick Thohir in a written statement, Tuesday, January 4.

According to the Ministry of Energy and Mineral Resources, the coal production target in 2022 will be higher than this year. The projected production target for 2022 is in the range of 637 million to 664 million tons, while the coal production target for 2021 will reach 625 million tons.

Meanwhile, domestic coal demand is also predicted to increase in 2022 with 190 million tons. This figure is an increase compared to this year's DMO quota which reached 137.5 million tons.

Data from the Ministry of Energy and Mineral Resources also reveals that natural phenomena, such as Hurricane La Nina that hit Kalimantan Island last November, resulting in increased rainfall, caused the realization of coal production until early December to reach 560 million tons or around 89.6 percent of the target.

Meanwhile, domestic coal absorption until early December had only touched 121.3 million tons or about 88.2 percent of the domestic market obligation (DMO) target.

"We continue to support the development of exports together with the Minister of Trade as a source of foreign exchange by calculating the domestic needs. Meanwhile, with the Minister of Transportation, synergy will be carried out with the parties to handle logistics," concluded Erick.