Erick Thohir Says the Government Will Fix PLN Contracts and Coal DMO Rules

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ONENEWS.MY.ID, Jakarta – Minister of State-Owned Enterprises (BUMN) Erick Thohir said the government would improve the long-term contract of PT Perusahaan Listrik Negara (Persero) or PLN to secure coal supply when commodity prices soar. The statement was in response to protests that developed after the government issued a policy of banning coal exports for the period 1-31 January 2022.

“We at the Ministry of SOEs will improve the long-term contract for supply needs in accordance with a joint meeting with the Attorney General’s Office and BPKP. In essence, domestic energy needs will be much more prioritized for smooth development,” Erick said in a statement delivered through the Public Relations Ministry of SOEs, Tuesday, 4 January 2021.

Previously, the coal ban policy came out after PLN reported low supply of commodities at the end of the year. The Ministry of Energy and Mineral Resources also recorded achievements domestic market obligation (DMO) of coal for domestic supply did not reach the target.

Domestic coal absorption until early December had only touched 121.3 million tons or about 88.2 percent of the DMO target. This is thought to have occurred because coal suppliers prioritized the export market when the reference price for coal increased.

Erick said that the government needed to overcome the problem of supplying coal and LNG as an energy source to support long-term national electricity supply. In addition to maintaining the supply of raw materials, Erick said, there needs to be a modernization of the logistics system and infrastructure. That way, Indonesia as the owner of the largest natural resources will not experience uncertainty about energy needs in the future.

The government held a meeting on coal supply on Monday evening, January 3. Attended by Erick Thohir, Minister of Energy and Mineral Resources Arifin Tasrif, Minister of Trade Muhammaf Lutfi, Minister of Transportation Budi Karya Sumadi, Attorney General’s Office, and BPKP, the meeting was held after President Joko Widodo gave a briefing on resource priorities to meet domestic energy needs rather than exports.

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