Coal Corporations Prefer Exports Over Supplying PLN; Expert Explains Why

TEMPO.CO, Jakarta - The executive director of the Center of Reform on Economics (CORE), Mohammad Faisal, on Wednesday commented on the existing issue of coal corporations opting to export their commodities rather than meet the domestic supply for state-electricity firm PLN. He believes the lack of incentives has a role in the matter apart from rising global coal prices. 

He argues that the current rise in coal prices has lured corporations to export their products, especially amidst the lack of domestic market obligation for companies to commit to PLN.  

"It’s because the incentives and disincentives for coal corporations are not working as planned," said Faisal to Tempo on August 10. "Under such a circumstance like this, it is reasonable if companies are avoiding working together in supplying PLN [with coal].”

Moreover, he believes the long-term plan must see the formation of a public service agency (BLU) for coal and legal protections to accommodate the existence of such BLUs. But as long as this agency is yet to operate, he encourages the government to make incentive and disincentive systems that can ensure that domestic supplies suffice.

As reported previously, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif revealed that 71 companies have yet to meet the DMO requirement to supply coal for PLN.

RIANI SANUSI PUTRI | MOH. KHORY ALFARIZI 

Click here to get the latest news updates from Tempo on Google News