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Govt mulls plan to form new entity to collect coal levies
The levies would be used to subsidize coal for PLN.
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Domestic use only: Heavy equipment is used to stockpile coal at the Kertapati coal terminal belonging to state-owned company PT Bukit Asam in Palembang, South Sumatra, in this undated photograph. (Antara/Nova Wahyudi)
T
he Energy and Mineral Resources Ministry is mulling a plan to form a special entity that collects coal levies to improve coal producers' compliance with the domestic market obligation (DMO) policy.
The levies will cover the difference between the DMO price of US$70 per ton and market prices, which have reached above $100 per ton since July last year. The coal mining industry blamed this price difference for their noncompliance.
Mining law expert Ahmad Redi said effective DMO governance would require the government to tighten its monitoring and sanctions policy. The legal entity that could collect fees in accordance with the State Treasury Law is a public services agency (BLU).
“If the scheme involves collecting levies from mining companies, [it is expected] to lead to the formation of a BLU,” Ahmad told The Jakarta Post on Friday.
Read also: Govt to use carrot, stick in coal DMO policy
Plans to improve DMO governance were taken after the government began on Jan. 1 a month-long ban on coal shipments to address a shortage in PLN’s coal stocks that could have led to widespread blackouts. The ban drove coal prices in China and Australia higher in January.
Now that the coal ban has been lifted, the Office of the Coordinating Maritime Affairs and Investment, Trade Ministry, Energy Ministry and state-owned electricity monopoly PLN still need to determine how to ensure long-term DMO compliance.
