Government has decided to cap ceiling price of coal for domestic market obligation (DMO) at US$70 per ton, for 6,322 calorie coal, or price is set based on the benchmark Indonesia Coal Price (HBA) if the coal price moves to below US$70 per ton within two years period.

Energy and Mineral Resources Ministry (EMR) also sets the maximum volume of coal to be purchased to generate coal-fired power plants at 100 million tons per year, or in accordance with the coal needs of the power plants.

The ministry said, the Government lowered the coal price for DMO to keep electricity tariffs unchanged until 2019. The cap on thermal coal for power is intended to shield state-owned power producer PT Perusahaan Listrik Negara (PLN) from price fluctuations.