Indonesian industry players urge the government to intervene due to soaring coal prices. The reason is, until now the government has not taken a policy to save the domestic industry, it seems to allow this condition. This is very worrying considering that if the government does not intervene immediately, the impact on the domestic industry will be very large. In addition to increasing the selling price of the product, this condition can lead to termination of employment (PHK) due to rising energy costs.So far, the Domestic Market Obligation (DMO) coal price capping policy of US$70 per metric ton is only for the general electricity sector or only for PLN. As a result, when global coal prices soar as they are now, many domestic industries that have been using coal such as cement, petrochemical, textile industries, have experienced difficulties. The reason is, the price of DMO coal they buy from domestic miners still refers to global prices.

“The fertilizer industry, then the cement industry, the petrochemical industry, textiles, are energy-intensive industries. So, if the energy is doubled, you can imagine it. For example, the portion for energy costs is 30%, if it doubles, it's not bad. The price of the product is pretty good," said the Executive Director of the Reforminer Institute, Komaidi Notonegoro, to reporters, Thursday (21/10).

Moreover, so far the majority of Indonesian coal is used for export. In 2021, of the production target of 625 million tons, the domestic market only absorbs a maximum of around 150 million tons. This means that there are still more than 450 million tons exported. "So, it's enough to make a profit of the 450 million tons. The rest is for domestic so that the competitiveness of the domestic industry is better," he said.

Komaidi asserted, if the price of its products rises, it will certainly reduce the competitiveness of the industry. If competitiveness decreases, income will also decrease. “What is really worrying is that if product prices go up and competitiveness is weak, companies will reduce their working capital. It certainly has an impact on reducing the workforce. That's what we didn't expect," he said.

Regarding price capping, Komaidi said that even if it was not the same as PLN at the level of US$70 per metric ton, it could be higher, for example US$80 per ton. “The point is that the general non-electricity industry needs to be given a DMO price. Whether it is the same as PLN or not, depends on the government's considerations in providing these facilities."

What is certain is that the government must intervene to take emergency policies to maintain the sustainability of the user industry. "Government intervention is urgently needed, especially to prevent price fluctuations of strategic goods such as cement products, textiles, fertilizers, steel, paper, and others," added Widodo Santoso, Chairman of the Indonesian Cement Association (ASI).

Meanwhile, the textile and textile product (TPT) industry also began to stagger because it had to dig deeper into its pockets for production costs. According to Redma Gita, Secretary General of the Association of Fiber and Filament Yarn Producers (APSyFI), currently there are 2 factories that have turned off their power plants. Meanwhile, 6 more factories reduce their generating capacity. All are in Tangerang, Karawang and Purwakarta.

For factories that turn off their power plants, they now turn to PLN. According to Redma, this step is inevitably carried out by many textile factories because the price of coal is too high.

Redma explained, so far, for producers of fiber and filament yarn, the need for coal is not only used as an energy source, but also as raw material for coal gasification.
Therefore, energy costs contribute up to 25% of the overall cost structure of the Textile and Textile Products (TPT) industry, with the fiber and filament sector being the largest users. "What is certain is that we are hit twice, namely for energy costs and raw material prices due to coal prices as well," said Redma.