Indonesia Considers Boosting Coal DMO and Evaluating Price

Government Plans to Increase Domestic Coal Allocation

The Indonesian government is exploring the possibility of increasing the domestic market obligation (DMO) for coal beyond the current threshold of 25%. Minister of Energy and Mineral Resources, Bahlil Lahadalia, indicated that the government is open to revising the current regulations to prioritize national interests. The existing DMO minimum of 25% is regulated under Ministerial Decree No. 267.K/MB.01/MEM.B/2022.

Price Review and Industry Implications

The government is also reviewing the $70 per ton price for DMO coal, which has remained unchanged for the past seven years. Industry stakeholders are currently awaiting official confirmation of these potential changes. Gita Mahyarani, Acting Executive Director of the Indonesian Coal Mining Association (APBI), emphasized the importance of ensuring that any increased DMO volume is effectively absorbed by domestic consumers to prevent market surplus.

Policy Context and Future Directions

The proposed changes are part of a broader effort to optimize domestic coal utilization while balancing industry requirements. The government's consideration of revising the DMO reflects its commitment to securing national energy needs while maintaining industry sustainability.