Govt to cap coal prices for domestic market

The government will soon issue a regulation to cap coal prices for domestic market so that local buyers will be able to get enough coal supply at reasonable prices.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Saturday that under the regulation, which will be issued in the form of ministerial decree, the maximum coal prices for the domestic market should not exceed the lowest prices of coal export.

He said that the regulation would be part of the domestic market obligation imposed on the country?s coal producers. ?We have issued a regulation on the domestic market obligation, but we have difficulties to set the prices due the lack of the market price benchmark,? he said.

Indonesia produced about 215 million tons of coal last year, and about 30 percent of the total production were sold in the domestic market. The demand from local buyers is expected to increase sharply in the coming years as the result of the sharp increase in the number of coal-fired power plants. (bernard)