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Govt vows to keep electricity affordable ahead of election
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Maintenance matters: A technician checks temperature readings at an electricity transformer in the switchyard of the Selorejo power plant in Malang regency. (The Jakarta Post/Wahyoe Boediwardhana)
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Bambang Gatot Ariyono, the mineral and coal director general at the Energy and Mineral Resources Ministry, said his office had no plan to revise its policy on coal at least until the end of this year.
Currently, the price of coal that is used to fuel most of state-owned electricity firm PLN’s power plants is capped at US$70 per ton.
“We will continue the DMO policy [25 percent from total production], including the price cap [$70] just as stipulated in the ministerial regulation,” he said, referring to the obligation for coal miners to sell a quarter of their output to PLN, known as the domestic market obligation (DMO).
As of December 2018, data from the ministry show that PLN purchased 95 million tons of coal at a price of $70 or less per ton, exceeding the target of 92 million tons.
The ministry’s electricity director general, Andy Noorsaman Sommeng, said he believed the DMO for coal and the coal price cap for PLN should suffice to prevent electricity prices from rising.
“Fortunately, in recent months, the global price of crude oil has been low at around $60 dollars per barrel. PLN had been worrying about its finances when the oil price stood at $80 dollars per barrel,” he said recently.
