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Indonesia government sets coal price for power plants

Indonesia government sets coal price for power plants

JAKARTA: Indonesia government, through the Ministry of Energy and Mineral Resources, set the price of coal for national electricity generators. The price was set through Minister`s Decree No. 1395K/30/MEM/2018 on the Sale Price of Coal for the Procurement of Electricity for the General Public.

Mr Agung Pribadi, head of Public Information and Communication Service Bureau of ESDM, said in Jakarta said that “This decision will be effective until 2019 and specifically valid for state-owned power company PLN for people`s electricity procurement.”

The government fixed the coal sale price for domestic steam power plants at USD 70 per tonne for coal, with a 6,322 GAR calorie category or at the Coal Reference Price, if the HBA is below USD 70 per tonne. Mr Pribadi said that “If the coal market price is below USD 70 per tonne, the lowest price will be used.”

The price for coal with other calorie categories is set based on the conversion of the 6,322 GAR calorie category with the one stipulated in the regulation in force. The stipulation of the special prices is retroactive from January 1, 2018, up to December, 2019. This means that sales contracts that have been going on since January 1, 2018, will be adjusted.

The Ministry of Energy and Mineral Resources stipulates that the maximum volume of coal purchase for the power plant at 100 million tonnes per year or in accordance with the coal requirement for power generation. The amount of royalty and tax payments is calculated based on the transaction price.