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E-book Indonesia Energy Transition Outlook 2023
This boom in coal exports endangered Indonesia’s energy supply. To secure its national coal supply for power system, the government sets a Domestic Market Obligation (DMO) of USD 70/tonne, 3 times lower than the global price. There are also subsidies for other fossil fuels, such as the public fund’s allocation of IDR 77.5 trillion for subsidizing fuel oil and LPG in 2022. Due to such regulations on coal and other fossil fuels subsidies, Indonesia is somewhat insulated from the global energy crisis. Without subsidies, Pertamax and Pertalite that are currently priced at IDR 13,900 and IDR 17,200 per litre would have increased to IDR 17,950 and IDR 17,200 per litre, respectively as per July 2022. Moreover, the sum of subsidies and compensations for those main energy sources is expected to be almost IDR 300 trillion this year.
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