Energy and Mineral Resources Ministry (ESDM) decided to lower Indonesian coal benchmark price to US$65.79 a ton from last month (US$72.67 per ton), the lowest since three years ago. The weaker September benchmark caused falling demand from European continent and lessen pressure from China and India.
Based on energy ministry data, coal production is prioritized to guarantee the fulfillment of domestic primary energy needs. But the realization of domestic coal utilization in 2018 is only 115 million tons or 21%.
This is below the domestic market obligation (DMO) target which is pegged at 25%, even though the number of utilization is up compared to 2017 which was only 97 million tons (MT) of coal. Currently, the government set a benchmark price for a DMO of US$70 valid until the end of 2019.
