JAKARTA (TheInsiderStories) – Energy and Mineral Resources ministry decided to lowered Indonesian coal benchmark price to US$65.79 a ton from last month was $72.67 per ton, the lowest since three years ago.

The ministry spokesman said on Monday (09/09), the weaker September benchmark caused falling demand from European continent and lessen pressure from China and India.

Based on energy ministry data, coal production is prioritized to guarantee the fulfillment of domestic primary energy needs. But the realization of domestic coal utilization in 2018 is only 115 million tons or 21 percent.

This is below the domestic market obligation (DMO) target which is pegged at 25 percent, even though the number of utilization is up compared to 2017 which was only 97 million tons (MT) of coal. Currently, the government set a benchmark price for a DMO of $70 valid until the end of 2019.

Based on the DMO rule, state-owned power producer, PT Perusahaan Listrik Negara (PLN), will purchase coal at the benchmark price level. The company has estimated would consume 97 MT of coal in 2019 and 109 MT of coal in 2020. This year, the government targets coal production of 489.12 million tons.

Written by Staff Editor, Email: theinsiderstories@gmail.com