The Ministry of Energy and Mineral Resources (MEMR), coal producers and state-owned electricity company PT Perusahaan Listrik Negara (PLN) are currently discussing to set the price of coal that are sold to domestic market under the so-called domestic market obligation (DMO).

The discussion was triggered by the coal price hike which has increased PLN’s expenses. The reason is that PLN buys coal from coal producers based on market price, however, PLN could not raise the tariff of electricity sold to consumers. As a result, PLN suffers extra burden anytime coal price surges as happens at present.

PLN has earlier requested the Energy and Mineral Resources to set the price of coal purchased by PLN under the domestic market obligation scheme. However, the ministry is ye to make a decision pending on results of discussion with all stakeholders.