Policy NoteExtractive Industry

From Left Pocket to Right Pocket: Determining Domestic and Export Coal Prices

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Determining the price of natural resource commodities affects the portion of tax and non-tax state revenues. The price of these commodities depends on demand and supply on the world market, which is then controlled by various policies in the respective producing and consuming countries. Especially for thermal coal in Indonesia, currently price fluctuations are influenced by demand from China and India.

Coal mining business entities in Indonesia are now required to buy and sell coal with a price agreement that refers to the price set by the government. This applies to sales both at home and abroad according to export trade activities, and sales to IUP/IUPK partners for production operations.

The Director General of Mineral and Coal on behalf of the Minister routinely announces the determination of reference coal prices and coal benchmark prices since 2010 in accordance with the Regulation of the Minister of Energy and Mineral Resources (Permen ESDM) Number 17 of 2010 which has been replaced by Minister of Energy and Mineral Resources Regulation Number 07 of 2017. Authority to determine This has now been taken over by the Minister of Energy and Mineral Resources in accordance with Minister of Energy and Mineral Resources Regulation 44/2017, while Minister of Energy and Mineral Resources Regulation 19/2018 confirms that the Minister determines the selling price of coal for domestic purposes.

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