Meet With Commission VII, Minister Of Energy And Mineral Resources Reports On The Progress Of Establishing A Special Coal Entity

A screenshot of the Minister of Energy and Mineral Resources Arifin Tasrif during a working meeting with Commission VII DPR in Jakarta, Tuesday, August 9.

JAKARTA - The government is increasingly strengthening its steps in establishing a coal public service agency (BLU).

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif in a Working Meeting (Raker) with Commission VII DPR RI reported the progress of the formation of BLU.

In his presentation, Arifin revealed that the formation of the Coal Public Service Agency (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 (Perpres).

"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.

"Draft Perpes and other derivative regulations have been prepared, in parallel this is discussed," added Arifin.

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 due to the large price disparity, resulting in the potential for domestic industries 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.

It doesn't stop there, manufacturers also prefer to avoid contracting with domestic industries.

"The DMO obligation of 25 percent to all coal companies is considered unfair because the quality of the coal owned is not in accordance with the needs of the domestic industry. So a new policy is needed to ensure the availability of domestic coal supply through the collection and distribution of compensation funds, namely forming a coal BLU DMO ," concluded Arifin.