KESDM Ensures Coal Prices For Power Plants Will Not Rise

Director General of Mineral and Coal (Minerba) of the Ministry of Energy and Mineral Resources (ESDM) Tri Winarno. (Photo: Maria Trisnawati/VOI)

JAKARTA - Director General of Mineral and Coal (Minerba) of the Ministry of Energy and Mineral Resources (ESDM) Tri Winarno said the selling price of coal to meet the domestic market obligation (DMO) of PLN power plants would not increase.

"If it goes up, it doesn't feel like it," said Tri Winarmo as quoted by ANTARA, Friday, February 14.

He said the Ministry of Energy and Mineral Resources would seek to create justice related to DMO. However, the mechanism is still under study.

"We are trying to create justice for DMO, but the mechanism is being studied again," he said.

Previously, Tri said that changes in DMO prices would later affect the amount of subsidies and so on. Therefore, what is most possible to adjust is the coal DMO mechanism for electricity.

Tri considered it natural for entrepreneurs to ask for an increase in the price of coal DMO for electricity, because as a seller, of course they wanted the highest price.

Previously, Minister of Energy and Mineral Resources Bahlil Lahadalia said that coal companies were actually willing to supply coal to PT PLN (Persero), but the price of coal DMO was below the market price.

Therefore, the realization of coal Management Agency Partners (MIP) is considered important. The coal MIP will later become compensation for the fulfillment of coal DMOs, as well as support for domestic financing for downstream projects.

There are three bank members of the Association of State-Owned Banks (Himbara) appointed as the manager of coal compensation funds (DKB), namely Bank Mandiri, Bank BNI, and Bank BRI.

Later, companies exporting coal will pay export fees to the DKB management bank.

The funds will be used as compensation for producers selling coal in the country (DMO), after deducting VAT obligations, operational costs, and service fees (fees), as well as reserve funds.

With this mechanism, producers who sell domestically continue to receive compensation for the price difference, thus creating a coal price balance for the needs of providing electricity for the public interest and domestic industrial needs at the price of coal abroad.