The ministry of energy and mineral resources (MEMR) decided to kept Indonesia' fuel prices even the global oil prices has dropped below US$20 a barrel - Photo: Special

JAKARTA (TheInsiderStories) – Indonesian government sets a monthly benchmark price of biodiesel to Rp7,358 a liter (US$0.52) in October, increased by Rp399 from Rp6,929 in a previous month. While bio-ethanol price set at Rp10.273 a liter from Rp10,091 month earlier, energy and mineral resources (EMR) ministry has announced today (09/26).

“The decree will be effective starting October 1, 2019, as stated in the Letter of the Director-General of New and Renewable Energy and Energy Conservation Number 2765/12/DJE/2019,” the ministry said, adding that the price is to be used in the implementation of mandatory B20 and applies to mix diesel oil both certain and general types of fuel oil.

The increase was influenced by the increase in the average price of crude palm oil (CPO) Kharisma Joint Marketing for the period of August 15 to September 14, 2019, which reached Rp7,038 a kilogram (kg), the spokesman Agung Pribadi said.

The biodiesel price is calculated using the formula average CPO + $100 a ton x 870 kg/m3 + transport cost. The amount of freight in the calculation formula for biodiesel prices follows the provisions in the Decree of EMR Ministry No.148K/12/DJE/2019, Pribadi noted.

A similar for Bioethanol after being calculated based on the formula determined, namely (average CDB molasses for a period of 3 months x 4.125 kg/liter) + $0.25/liter, he adds.

“Conversion of exchange rates uses the reference of the average rate of Bank Indonesia for the period of August 15 to September 14,” Pribadi said, adding the price set every month and evaluated at least every 6 months.

Meanwhile, the Indonesian Palm Oil Association (GAPKI) noted the country’s palm oil exports hit 2.92 million tons in July, 15.87 percent higher than the previous month, its latest data showed on Tuesday. Cumulatively, the export volume during January-July reached 19.76 million tons, an increase of 6.7 percent over the same period last year.

GAPKI executive director Mukti Sardjono said that biodiesel exports made the biggest contribution to the increase in the monthly export volume of palm oil and its derivatives in July. Noted, the monthly export volume of biodiesel increased by 93 percent to 187,000 tons in July from the previous month.

The increase in that period was followed by an increase in crude palm oil exports by 56 percent to 678,000 tons, palm kernel oil both crude and processed by 11.2 percent to 129,000 tons and processed palm oil, both solid and liquid, by 5.5 percent to 1.7 million tons. The only palm oil product that experienced a decline was oleochemicals which fell 18 percent to 219,000 in July.

Sardjono also noted that on a monthly basis export increases were observed highest in China, India, and Bangladesh.

“African swine flu reduced soybean oil production in China, resulting in China increasing palm oil imports from Indonesia by almost 50 percent in June,” he said in a statement.

He went on saying that the biggest increase in export volume of palm oil and its derivatives from Indonesia occurred in Bangladesh by 264 percent, India by 77 percent despite tariff discrimination, Africa by 32 percent, other countries except for the European Union (EU) by 41 percent, and the EU is 17 percent.

However, American soybean producers present a new rival to Indonesian palm oil as the former ramps up exploration into new markets due to the closure of Chinese markets as part of the ongoing United States-China trade war.

The statement also noted production rose 8.5 percent month-to-month to 4.31 million tons in July this year, despite being only 0.7 percent higher than the same month last year. While domestic consumption hit 1.43 million tons in July, marginally higher by 0.3 percent monthly but significantly higher by 42.2 percent compared to the same month last year.


Written by Lexy Nantu, Email: