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Indonesia Lowering Biofuel Benchmark Prices in June

JAKARTA (TheInsiderStories) – Indonesian government lowered basic index price for biodiesel to Rp6,977 (US$0.48) per liter but raised bioethanol price to Rp10,201 a liter, energy and mineral resources (EMR) ministry said on Wednesday (06/12).

The ministry noted, the biodiesel price decreased by Rp371 from the previous month, which was Rp7,348 per liter. While bioethanol price increased from a level of Rp10,195 per liter.

“The two commodities underwent different changes due to fluctuations in the price of palm oil and the movement of the rupiah exchange rate against the US dollar,” the ministry said in a written statement.

It said, the tariff determination still does not include the calculation of freight costs, which are guided by the decision of the ministry No.91K/12/DJE/2019.

“Biodiesel and bioethanol trends this month are different. This price also applies to B20 or a mixture of biodiesel to fuel oil by 20 percent,” said the spokesman Agung Pribadi in Jakarta.

The decline of biodiesel price, said Pribadi, was due to the decrease in palm oil prices in the calculations stated in the provisions of the director general’s letter of energy and new renewable conservation number 1452/12/DJE/2019.

The biodiesel market index price is sustained by the average palm oil price on April 15, 2019 on May 14, which is Rp6,598 per kg.

The reverse change occurred at the bioethanol market index price. The increase in bioethanol prices is determined by the average sugar cane drops of PT Kharisma Pemasaran Bersama Nusantara during April 15 to May 14, which recorded Rp1,611 per kg plus US dollar amount, which is $0.25 per liter multiplied by 4,125 kg per liter.

Furthermore, he said, the ministry is planning to test 30 percent Biodiesel (B30) on vehicles on June 13. The mandatory use of biodiesel has been rolling since 2016 ago in Indonesia.

From this period the production and utilization of biodiesel continued to increase from year to year. The ministry noted, in 2018 domestic consumption rose 45 percent or around 3.75 million kiloliters compared to 2017.

The uses of B30 is expected to cut oil fuel imports by 55 million barrels. This number is equivalent to the volume of B30 which will be tested which is 9 million kiloliters.

In the trial, the use of biofuels will be tested for its impact on vehicle emissions. In addition, it will also see the extent to which B30 efficiency can be produced by comparing the use of ordinary diesel fuel, the ability of lubricants to fuel and its effect on the engine.

The government targets the use of CPO for domestic fuel to reach 9 million kiloliters, equivalent to 7.8 million tons of palm oil. In the development of B20, CPO uptake is targeted at 6.2 million kiloliters, equivalent to 5.4 million tons.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com