Ministry Of Energy And Mineral Resources Asked To Reinforce Sanctions For DMO Violators Instead Of Forming Coal BLU

JAKARTA - Gadjah Mada University (UGM) Energy Economics observer Fahmy Radhi assessed that the government should reject the formation of a coal public service agency (BLU). The reason is that the application of the coal BLU violates Article 33 of the 1945 Constitution.

"Unlike Sawit, which implements the BLU scheme, coal is a natural resource controlled by the state for the greatest prosperity of the people. Coal DMO is the implementation of Article 33 of the 1945 Constitution," said Fahmy to VOI, Thursday, August 4.

Fahmy added that the discourse on the formation of a BLU which will regulate coal export levies will not solve the problem of domestic supply.

"The discourse on coal BLU, which was once raised by Minister Luhut Binsar Panjaitan, has come back to the fore. The problem is, although it is still at the discourse stage, many entrepreneurs do not supply coal to PLN according to the DMO provisions," he said.

Fahmy asked the Ministry of Energy and Mineral Resources to strictly impose sanctions on export bans and cessation of production for coal entrepreneurs who disobey the DMO provisions.

"Therefore, government policies related to coal should be DMO Yes, BLU No," he said.

Meanwhile, Chairman of the Association of Indonesian Energy, Mineral and Coal Suppliers (Aspebindo) Anggawirra said his party supports the concept of the Coal Public Service Agency (BLU).

The establishment of this coal BLU aims to optimize the coal supply chain to maintain energy security.

"First, there is indeed a price disparity that is too high, then there is a DMO regulation and now it is hoped that with the existence of BLU there will not be a high disparity because it will mutually subsidize each other," he told VOI.

For that, he said, his party was waiting for the socialization and the mechanism for implementing the BLU.

He hoped that the BLU levy would not only apply to the electricity industry, but also other industries.

For your information, mining companies are required to supply coal to PLN according to the DMO price of US$70 per metric ton and the fertilizer and cement industry at US$90 per metric ton.

However, with the existence of this BLU, the price of domestic special coal or Domestic Market Obligation (DMO) will be released to the market mechanism.