KONTAN.CO.ID - JAKARTA. Indonesian legislators on Tuesday pressed the government to tighten rules on domestic coal sales, amid concern that miners will choose to pay fines instead of meeting a requirement to sell a quarter of their output to local power generators. The parliamentary energy committee met during recess on Tuesday, fearing the world's biggest thermal coal exporter was headed for a repeat of a domestic supply crisis late last year that saw exports banned for a few weeks in January, triggering panic among foreign buyers. Indonesia imposes a so-called Domestic Market Obligation (DMO) where miners must sell 25% of their output onshore, at prices capped at $70 per tonne for power generators and $90 per tonne for local industry.
Though the coal inventory of state power utility Perusahaan Listrik Negara (PLN) was above the secure level of 4.5 million tonnes, supplies were declining as power demand rises, its chief executive Darmawan Prasodjo told the hearing. "If this continues, we may see a crisis again," Darmawan said. Energy minister Arifin Tasrif accepted there were risks of local supply issues due to the big gap between the capped domestic prices and the prices paid by offshore buyers. "There are tendencies of avoiding contracts with domestic industries," Arifin told the committee. Baca Juga: Flush With Cash, Pfizer Buys Global Blood Therapeutics in $5.4 Billion Deal Indonesia coal benchmark price has stayed above $70 per tonne level since January 2021 but surged to a record $321.59 per tonne this month, as the war in Ukraine exacerbated the energy supply crunch.
