JAKARTA, Nov 19 (Reuters) – Indonesia’s energy minister Arifin Tasrif said on Tuesday his ministry plans to maintain a price cap on coal being sold to state electricity utility, PT Perusahaan Listrik Negara (PLN) next year.
The government capped the price of coal sold to PLN at $70 per tonne from early 2018 after the utility was told not to raise electricity tariffs for certain customers. (reut.rs/2oXIy2m)
The price cap was aimed at shielding PLN from cost fluctuations.
PLN is expected to resume to adjusting its electricity prices every three months in 2020 for customers, such as industrial users.
Tasrif, who was appointed minister last month for Joko Widodo’s second presidential term, said he expects the coal price policy for PLN to remain unchanged.
“If we can maintain the price, why not,” he told reporters. “We need to maintain stability.”
When the price in Indonesian Coal Benchmark Price (HBA) drops below $70 per tonne, the domestic thermal coal price for power stations reverts to HBA.
The so-called domestic market obligation of 25% will also be kept, director general of coal and minerals Bambang Gatot Ariyono told reporters. The rules require coal miners to sell 25% of their output to domestic buyers such as PLN. (Reporting by Wilda Asmarini Writing by Fransiska Nangoy)