INDONESIA TO BOOST COAL OUTPUT AS OIL PRICES SURGE

JAKARTA, March 20 (Bernama) -- Indonesia plans to increase coal production in response to rising global oil prices, Coordinating Minister for Economic Affairs Airlangga Hartarto said.

He said the move aims to cushion the impact of higher fuel prices and stabilise domestic energy and commodity prices.

“The President has directed that coal production volumes be increased, which means there will be adjustments to the work plan and cost estimate (RKAB; Rencana Kerja dan Anggaran Biaya),” he said at a press conference after a meeting with President Prabowo Subianto on Thursday.

Video of the press conference was shared on the Presidential Secretariat’s YouTube account.

As of Thursday, brent crude oil prices rose by 6.60 per cent to US$114.47 per barrel.

RKAB denotes mining companies’ approved annual work plans and budgets, including production targets. Adjustments to the RKAB would enable higher coal output.

Airlangga said the government is also reviewing the imposition of export taxes on coal with the rate to be determined by a designated team, as part of efforts to boost state revenue amid elevated energy prices.

In addition, Airlangga said Indonesia is pushing to accelerate the conversion of diesel power plants (PLTD) to solar-powered facilities to reduce reliance on costly fuel imports.

“With oil prices currently high, the President has instructed that this conversion be realised immediately,” he said, adding that relevant agencies have been tasked with resolving technical issues related to the transition.

Separately, Airlangga said the government is preparing measures to improve energy efficiency, including flexible work arrangements, which is expected to be implemented soon.

He said the policy, which is still being finalised, is expected to apply not only to civil servants but also to the private sector and regional administrations.

Airlangga also reaffirmed the government’s commitment to maintaining the State Budget (APBN) deficit below three per cent of gross domestic product (GDP), in line with previous directives, by implementing spending efficiencies across ministries and agencies.

The Indonesian government has reassured the public that subsidised fuel prices will remain unchanged and stockpile is sufficient ahead of the Aidilfitri festivities despite global oil prices hovering above $100 per barrel.

Current price for Pertalite – subsidised petrol – stays at Rp10,000 (about RM2.32) per litre while subsidised diesel is maintained at Rp6,800 (about RM1.58) per litre.

Energy and Mineral Resources Minister Bahlil Lahadalia said fuel subsidies in the APBN are based on an average crude oil price assumption of US$70 per barrel for the full fiscal year.

Meanwhile, Finance Minister Purbaya Yudhi Sadewa said the government would absorb the impact of rising energy prices through the state budget to avoid burdening consumers.

“We are absorbing the pressure into the state budget. If we let it pass through, people could panic, as seen in other countries,” he told reporters, as reported by ANTARA News Agency, on Thursday.

He said Indonesia’s energy subsidy mechanism is structured within an annual budget framework, allowing the government to anticipate the impact of global oil price fluctuations.

-- BERNAMA