From Left Pocket to Right Pocket: Determination of Coal Price for Domestic and Export Market

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Price determination of the natural resources commodities affects the portion of tax and non-tax revenues. The commodity price depends on the demand and supply in the world market, which is further controlled by various policies in the producer and consumer countries respectively. Especially for the thermal coal in Indonesia, price fluctuations are affected by the rise and fall of demands from China and India.

Coal mining enterprises in Indonesia are now required to sell coal at price level as in agreements refering to price stipulations by the government. This policy is valid in sales both inside and outside the country according to the export trade activities, and sales to the partners of the production operation mining licenses.

Directorate General of Minerals and Coal on behalf of Minister of Energy and Mineral Resources announce monthly the stipulation of the coal price reference and thermal coal benchmark price since 2010 according to the Energy and Mineral Resources Ministerial Regulation Number 17 Year 2010 which has been replaced by Ministerial Regulation No. 07/2017. The pricing authority is now taken over by the Minister of Energy and Mineral Resources pursuant to the Ministerial Regulation No. 44/2017 while by the Ministerial Regulation No. 19/2018 the Minister stipulates the coal sales price for domestic interests.

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