Indonesia lawmakers call for tougher rules to avert another coal crisis

JAKARTA, Aug 9 (Reuters) – Indonesian legislators on Tuesday pressed the federal government to tighten guidelines on home coal gross sales, amid concern that miners will select to pay fines as a substitute of assembly a requirement to promote 1 / 4 of their output to native energy turbines.

The parliamentary power committee met throughout recess on Tuesday, fearing the world’s greatest thermal coal exporter was headed for a repeat of a home provide disaster late final yr that noticed exports banned for just a few weeks in January, triggering panic amongst overseas consumers. learn extra

Indonesia imposes a so-called Home Market Obligation (DMO) the place miners should promote 25% of their output onshore, at costs capped at $70 per tonne for energy turbines and $90 per tonne for native trade.

Although the coal stock of state energy utility Perusahaan Listrik Negara (PLN) was above the safe degree of 4.5 million tonnes, provides had been declining as energy demand rises, its chief govt Darmawan Prasodjo advised the listening to.

“If this continues, we might even see a disaster once more,” Darmawan mentioned.

Power minister Arifin Tasrif accepted there have been dangers of native provide points because of the huge hole between the capped home costs and the costs paid by offshore consumers.

“There are tendencies of avoiding contracts with home industries,” Arifin advised the committee.

Indonesia coal benchmark value has stayed above $70 per tonne degree since January 2021 however surged to a document $321.59 per tonne this month, because the struggle in Ukraine exacerbated the power provide crunch.

Lawmakers urged authorities to evaluate the scale of fines imposed for failing to fulfill the DMO and create an company to assist PLN safe coal provides and gather levies.

“We have to evaluate why companies would relatively pay fines than meet their obligation, there have to be one thing unsuitable right here,” mentioned legislator Diah Nurwitasari.

PLN’s declining stock was a warning for the federal government to behave quick, mentioned different lawmaker, Dony Maryadi Oekon.

Contacted by Reuters, Hendra Sinadia, an official at Indonesia Coal Miners Affiliation, mentioned members with contracts with PLN had been dedicated to fulfill necessities, and the affiliation couldn’t touch upon PLN’s general coal shares.

Reporting by Fransiska Nangoy; Modifying by Martin Petty

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