Indonesia Coal Pricing One Issue Under Review in Lower Power Tariffs Push: Minister i

Indonesia's energy minister said in a statement on Thursday (14/09) that revisions to domestic coal pricing were one of several measures being considered in efforts to reduce electricity tariffs charged by state power utility Perusahaan Listrik Negara (PLN). (BeritaSatu Photo/Danung Arifin)

By : REUTERS | on 10:56 AM September 14, 2017
Category : Business, Commodities, Featured

 

Jakarta. Indonesia's energy minister said in a statement on Thursday (14/09) that revisions to domestic coal pricing were one of several measures being considered in efforts to reduce electricity tariffs charged by state power utility Perusahaan Listrik Negara (PLN).

"Primary energy costs for power generation are one component in setting electricity tariffs," Energy and Mineral Resources Minister Ignasius Jonan said in the statement. "No decision whatsoever" has been made yet on the matter, the minister said.

Share prices of some of Indonesia's biggest coal miners plunged on Wednesday after the minister said he would be open to revising domestic coal pricing rules.

"There are still several other components that can be made more efficient by PLN to make production costs more competitive and electricity prices that are more affordable for the broader community," Jonan said in his Thursday statement.

Recent high coal prices have put pressure on PLN, which buys the bulk of the roughly 90 million tonnes of coal consumed domestically each year. PLN has proposed to the government to adopt a cost plus 15-25 percent margin pricing mechanism for the coal it purchases.

Jonan said on Thursday the ministry has not yet held formal discussions on PLN's coal pricing proposal. He said the ministry planned to seek input from PLN and independent power suppliers, as well as coal producers, "to reach a meeting point that accommodates the interests of all sides."

"[We] must consider sustainability of businesses in shaping primary energy prices that are fair," Jonan said.

Coal company share prices rebounded on Thursday morning, recovering some of the losses from a day earlier.

As of 03:13 GMT, Bukit Asam was up 3 percent at Rp 10,425, Adaro Energy was up 2 percent at 1,750 rupiah and Bumi Resources was up 2 percent at 222 rupiah.

Additional reporting by Wilda Asmarini and Cindy Silviana

Reuters

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