Overcoming Price Disparity, Commission VII Urges The Ministry Of Energy And Mineral Resources To Immediately Realize Coal BLU DMO

JAKARTA - Commission VII of the DPR RI urges the Ministry of Energy and Mineral Resources (KESDM) to realize the establishment of a Public Service Agency (BLU) for the Domestic Market Obligation (DMO) of coal. The establishment of BLU is aimed at overcoming the high price disparity between the domestic and foreign markets.

"Commission VII of the DPR RI urges the Minister of Energy and Mineral Resources of the Republic of Indonesia to immediately realize the formation of a coal BLU DMO to resolve the problem of the high coal price disparity between the domestic and foreign markets," said Commission VII Chairman Sugeng Suparwoto in a working meeting with the Minister of Energy and Mineral Resources Arifin Tasrif.

For that, Sugeng continued, regulations are needed that can provide an umbrella for the formation of this BLU. At the working meeting it was agreed that the legal umbrella was in the form of a presidential regulation (Perpres). After the Presidential Decree is issued, the Ministry of Energy and Mineral Resources must immediately form the BLU DMO for coal.

As is known, previously coal energy products experienced a crisis, until the government stopped coal exports at the beginning of this year. PT PLN had a shortage of coal supply. The members of Commission VII of the DPR who attended this meeting had questioned the scarcity of coal in the country, while exports continued to be carried out. For this reason, MEMR must respond by developing strategies and policies that are appropriate to regulate coal DMO.

On the same occasion, the Minister of Energy and Mineral Resources also conveyed the progress of the formation of the BLU. In his presentation, he said that the formation of a coal BLU is still experiencing several obstacles, such as the current initiative permit which has not yet been approved because there is still a debate over whether the BLU uses a Government Regulation (PP) or a Presidential Regulation.

"We have held a clarification meeting to discuss the requested and required initiative permits," he said in Jakarta, Tuesday, August 9.

Not only that, Arifin also said that currently the ESDM Ministry has submitted a letter to the State Secretariat (Setneg) regarding additional explanations so that the legal umbrella is in the form of a Presidential Regulation.

In addition, the ministry has also prepared drafts of Presidential Regulations and other derivatives such as Ministerial Regulations, Ministerial Decrees of Energy and Mineral Resources and PMK.

The background for the formation of this BLU is that the current condition of the coal price is quite high, the company tends to get better income because of the large price disparity, resulting in the potential for the domestic industry to experience a supply shortage.

For information, the Reference Coal Price (HBA) in August 2022 has increased by 2.59 US dollars per tonne from the previous month.

So the August 2022 HBA will be US$ 321.59 per ton.

In addition, sanctions in the form of payment of compensation funds with small tariffs and payment of fines for those who violate the contract cause coal companies to tend to prefer to pay sanctions and compensation in order to be able to export.