PT Perusahaan Listrik Negara (PLN) requested the Domestic Obligation Market (DMO) Policy to be continued

Jakarta, APBI-ICMA: REPUBLIKA.CO.ID January 29 2019 reported that PT Perusahaan Listrik Negara (PLN) requested that the Domestic Obligation Market (DMO) policy or the price and special quota of coal for PLN be continued.

This policy according to PLN needs to continue to be applied if the government wants to maintain electricity tariffs in accordance with people's purchasing power.

The Director of PLN's Strategic Procurement, Supangkat Iwan, explained that the DMO policy is one of the policies that can make PLN access affordable raw materials. This is because the portion of PLTU in the national energy mix is still 53 percent. In addition, the PLTU is still a generator that produces cheap electricity.

"We hope that the DMO will continue. This is to determine that electricity tariffs can still be maintained. Because today there are many PLN plants that still use primary energy. When the US dollar and primary energy prices will certainly increase production costs," Iwan said in the DPR RI, Monday (1/28).

Iwan admitted that not all coal companies could meet the provisions of the DMO policy. However, according to Iwan, proposals from several coal companies that requested DMO policies to be replaced by contributions were not a solution.

Iwan assessed that the contribution system would be as if it would contribute to PLN. Even though according to Iwan, coal belongs to the government and the government has the right to make policies regarding coal.

"I see this, if the contributions are as if the miners are selling and joint ventures and donated to PLN. Even though the government can regulate tax royalties, set a maximum price. DMO is more appropriate for us," Iwan said.

However, in its journey, the DMO policy did not run optimally. This is illustrated by the realization of the DMO in 2018, out of 32 listed coal companies, they cannot meet the DMO requirement of 25 percent.

Finally, the Ministry of Energy and Mineral Resources, through the Directorate General of Mineral and Coal, must impose sanctions by reducing the company's production quota in this Budget and Expenditure Work Plan (RKAB) in 2019.


Source: continue

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