China Is Having a Great Energy Crisis
Indonesia is like a 'collapse of durian' over the energy crisis experienced by China and many countries in the world. Profits are not only obtained by the business world but also the government.
"There is a kind of "blessing in disguise" from this energy crisis because Indonesia takes advantage of rising commodity prices and increasing demand for key commodity prices," said Center of Reform on Economics (Core) economist Yusuf Rendy Mantlet, Dikutif, FMM from CNBC Indonesia. , Friday (15/10/2021)
In Yusuf's note, the mining sector has even grown 61% during January - August 2021 with the biggest spike in coal commodities. Higher than industry or agriculture. "This condition will also encourage export growth throughout 2021," he explained.
style="text-align: justify;">Another impact is state revenues, particularly in the export duty group and non-tax state revenues (PNBP) for natural resources (SDA).
"Several state revenue posts such as export duties and Minerva PNBP experienced very significant growth, export duties grew 891% in August, while mineral and coal mining growth soared 87%," said Yusuf.
However, Yusuf warned that this advantage could turn into a threat at a certain time. The government is expected to be more anticipatory towards various bad possibilities that arise in the future.
"Behind the hidden gains, there are hidden risks if China's economy slows down due to the energy crisis," he said
"We know that China is a major player in the global economy, the slowdown in China's economy will indirectly slow down global economic growth, including economic growth in emerging markets, including Indonesia," said Yusuf. Starting with natural gas, the price spike was followed by coal, petroleum, and crude palm oil (CPO).
Yes, natural gas prices are getting more expensive. On Tuesday (12/10/2021) at 08:12 WIB, natural gas prices at Henry Hub (Oklahoma, United States) rose 0.73% to US$ 5.38/MMBtu. Since the end of 2020 (/year-to-date/), the price of this commodity has soared 112.05%.
One of the impacts of rising natural gas prices is the high cost of generating electricity. In Europe, Refinitiv noted that the price of natural gas generation is EUR 89.4/MWh on October 5, 2021. Meanwhile, coal is much cheaper at EUR 58.06/MWh. So it's no wonder that coal is now the alternative to natural gas.
In addition to coal, oil is also an alternative to natural gas as a primary energy source for power generation. This makes oil prices soar.
In September 2021, the average ICP was at US$ 72.7/barrel, the highest since October 2018. During January-September, the average ICP was US$ 65.21/barrel, up 63.51% compared to the nine-month average first 2020.
The ICP assumption in the 2021 APBN is US$ 45/barrel. So the realization in January-September has increased by US$ 20.21 from this assumption.
From a ceteris paribus point of view, every US$ 1 increase in ICP will make the State Budget 'profit' of Rp 0.9 trillion. So, if the price increases by US$ 20.21 from the assumption, then the 2021 State Budget will receive a 'blessing' of Rp 18.19 trillion.The electricity crisis in China has triggered blackouts in several provinces such as Guangdong, Heilongjiang, Jilinm and Liaoning. The blackout has occurred since June 2021.
As a result of this energy crisis, residents' activities and business operating hours are disrupted. The local Chinese government stated that several companies reduced the working hours of employees due to the problem. This will certainly threaten the economic growth of the Bamboo Curtain country.
Not only China, Europe is also worried about an energy crisis that will cause energy tariffs such as natural gas to increase since September 2021. In addition, electricity bills for households and businesses are also increasing. The energy crisis in a number of these countries will have a positive impact on the economy. Indonesian country. Indonesia can take advantage of many opportunities to earn income and increase the country's foreign exchange earnings.
Energy observer and Reformer Institute Komaidi Notonegoro said that coal producers in Indonesia would have the potential to reap multiple benefits.
“The effect of the energy crisis will have a positive impact, as commodity prices rise. Coal exporters can quite benefit from it,” said Komaidi, Tuesday (12/11). However, coal producers cannot arbitrarily increase their export activities. The reason is, companies must meet domestic coal needs called Domestic Market Obligations (DMO).
The policy requires producers to sell 25 percent of total production to meet Indonesia's electricity needs. In other words, the coal must be sold to PT. PLN (Persero).