The price was set through Minister`s Decree No. 1395K/30/MEM/2018 on the Sale Price of Coal for the Procurement of Electricity for the General Public.
"This decision will be effective until 2019 and specifically valid for state-owned power company PLN for people`s electricity procurement," Agung Pribadi, head of Public Information and Communication Service Bureau of ESDM, said in Jakarta on Friday.
The government fixed the coal sale price for domestic steam power plants (PLTU) at US$70 per tonne for coal, with a 6,322 GAR calorie category or at the Coal Reference Price (HBA), if the HBA is below $70 per tonne. "If the coal market price is below $70 per tonne, the lowest price will be used," Pribadi said.
The price for coal with other calorie categories is set based on the conversion of the 6,322 GAR calorie category with the one stipulated in the regulation in force. The stipulation of the special prices is retroactive from January 1, 2018, up to December, 2019. This means that sales contracts that have been going on since January 1, 2018, will be adjusted.
The Ministry of Energy and Mineral Resources stipulates that the maximum volume of coal purchase for the power plant at 100 million tonnes per year or in accordance with the coal requirement for power generation. The amount of royalty and tax payments is calculated based on the transaction price.
A company that sells coal for national electricity may be given additional production of 10 per cent, if it meets the requirements in accordance with applicable regulations. Such pricing applies only to national electricity sales. The price of coal for use outside the interest mentioned above will still refer to HBA.
Meanwhile, ESDM Minister Ignatius Jonan confirmed that the coal sale price for steam power plants has been set, so that electricity tariffs are maintained, in order to protect the purchasing power of people and competitive industries