Jakarta, CNN Indonesia — The price of coal continues to climb throughout 2022. The increase in fossil commodity prices was due to several factors, starting from the energy crisis in Europe to the high demand from India.
Launching Trading Economics, Tuesday (27/12), the movement of coal prices fluctuated but the trend continued to rise.
Just watch, on January 3, 2022, the price of coal was at the level of US$157.5 per ton. Meanwhile, on December 23, 2022, the black gold price was at the level of US$ 401.1 per ton.
This means that coal prices have more than doubled compared to the beginning of this year.
The steepest price increases came a few weeks after Russia invaded Ukraine in mid-February. At that time, coal prices were still at US$239 per tonne and then jumped to US$422.6 per tonne on March 7, 2022.
Even so, coal prices dropped again to US$258 per ton on March 29 2022. After that, coal prices continued to rise until they reached their highest level on September 5 2022, namely US$457.8 per ton.
The most significant increase in coal prices was due to gas shortages in Europe due to the Russo-Ukrainian war. It is noted that several countries on the Blue Continent are starting to switch back to fossil power plants.
A number of European countries began to intensify their coal imports when gas supplies were running low. This is because the Russian government has cut their energy exports to European countries that refuse to pay in rubles.
Although some countries have been able to cut their energy dependence on Russia, there are fears that the energy crisis will unprepare citizens for the coming winter.
Therefore, several countries decided to leave the energy transition in the form of gas and return to using coal as an energy source.
Several European countries that have returned to producing coal amid the energy crisis include Germany, Australia, the Netherlands, and Italy.
On the other hand, the surge in coal prices has become a separate problem for Indonesia. In early August 2022, Minister of Energy and Mineral Resources Arifin Tasrif said that PT PLN (Persero) and other domestic industries were threatened with a shortage of black gold supply.
According to him, the company mostly exports rather than fulfills the domestic market obligation (DMO) of coal supply.
“This causes the potential for the domestic industry to experience a shortage,” said Arifin in a hearing with Commission VII DPR RI some time ago.
Last August, the Ministry of Energy and Mineral Resources noted that international coal prices had touched a level above US$340 per ton. To be precise, the ICE Newcastle coal price was at the level of US$349 per tonne on August 8, 2022.
Meanwhile, the DMO price is only US$70 per ton for the electricity sector and US$90 for the non-electricity industry.
Arifin assesses that entrepreneurs are reluctant to fulfill the DMO because the sanctions in the form of paying compensation fines are relatively small. On the other hand, the gains from exports outweigh the costs of sanctions.
“Therefore, there is a tendency to avoid contracts with domestic industries,” explained Arifin.
