Coordinating Minister of Maritime Affairs Luhut Binsar Pandjaitan - Photo: the Ministry.

JAKARTA (TheInsiderStories) – Indonesia’ Coordinating Minister for Maritime Affairs (CMMA) Luhut Binsar Pandjaitan believed that the implementation of the 30 percent biodiesel mixture (B30) program could help to reduce fuel imports of US$3 billion. This program is expected to be implemented early next year.

Every year, the fuel consumption in Indonesia continue to rise. National consumption for fuel is estimating around 1.3 million barrels per day (bpd) are met by domestic refineries of 910 thousand Bpd, and imports of 370 Bpd, and biodiesel of 50 thousand Bpd. The oil and gas import deficit of $13.4 billion was the biggest contributor to the 2018 trade balance deficit of $8.57 billion.

President Joko Widodo previously highlighted the trade balance deficit reached $2.14 billion in the first five months of 2019 that mainly triggered by a decline in exports by 8.6 percent throughout January – May and a drop in imports by 9.2 percent.

Based on Central Statistics Agency data, the country’s oil and gas imports amounted to $9.08 billion in January-May or a deficit of $3.74 billion, compared to the exports at $5.34 billion in the same period. During the period, the oil and gas import was actually lower than that of last year’s $11.922. The deficit was recorded at $5.12 billion in the first five months of 2018.

“Therefore, there must be an effort to reduce fuel imports by diversifying fuel with other energy sources, especially biofuels or green fuel,” said Pandjaitan when he was the keynote speaker in the Workshop on Utilization of Palm Oil for Green Fuel in supporting Palm Oil Farmers’ Energy Security and Welfare in Jakarta on Tuesday (07/16).

It said, currently, the production of crude palm oil (CPO) has reached 44 – 46 million tons from 14 million ha of oil palm land. It is predicted that by 2025 palm oil production will reach 51.7 million tons. But, it will lead to oversupply, especially in 2030 there is a threat of a total ban on palm oil products in Europe.

“Meanwhile, the palm oil industry has employed 5.3 million independent smallholders, and as many as 17 million people depend on oil palm. When compared to other regions, regions with the expansion of oil palm plantations have reduced poverty rates,” he said.

He explained the use of B30 is a concrete step for the government to continue to develop the oil palm industry, prosper the oil palm farmers, and ensure the availability and stability of domestic fuel prices.

Pandjaitan also guarantees the use of B30 fuel will not make the performance of the vehicle down. The use of B30 is related to the government’s plan in 2020, which requires every diesel vehicle to use B30 fuel, including trains, ships, and heavy equipment in mining.

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