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Economy

Indonesia to lose $630m in revenue from coal price cap

Government pays high price to woo voters ahead of 2019 election

Shares in Adaro Energy and other coal miners have tumbled in the wake of the ministry's announcement.   © Reuters

JAKARTA -- Indonesia's decision to impose a price cap on domestic coal prices will lower state revenue by up to 9 trillion rupiah ($630 million) this year, a senior finance ministry official said on Tuesday.

The remarks are yet another indication that President Joko Widodo is hitting the brakes on reform ahead of the upcoming presidential election in April 2019. The new rule, which was issued by the Energy and Mineral Resources Ministry on March 9, caps power plant coal prices at $70 per ton -- about 30% lower than current market prices -- until 2019.

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