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Govt draws plan to increase biodiesel use
The government is drawing up a policy to increase the use of biodiesel as part of its efforts to contain the current account deficit
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The government is drawing up a policy to increase the use of biodiesel as part of its efforts to contain the current account deficit.
Deputy Finance Minister Mahendra Siregar said in Jakarta on Wednesday that together with the Energy and Mineral Resources Ministry, his ministry had been developing a plan to increase the use of biodiesel.
'The policy is being finalized with an aim to reduce oil and gas imports significantly,' he said as quoted by Antara news agency.
Mahendra further explained that the policy was aimed at reducing the current account deficit and to maintain the stability of rupiah exchange rate, the first of four policies in the government's economic package issued on Friday.
In the second quarter of 2013, the current account deficit reached 4.4 percent of the Gross Domestic Product (GDP).
Mahendra said the mandatory biodiesel use of 10 percent would be implemented starting from September 2013 to replace subsidized diesel fuel in Bali, Java, Kalimantan and Sumatra.
'For other regions, the policy will be implemented in January 2014,' he said.
As a second policy, Mahendra said that the increased use of non-subsidized transportation and industry would be implemented in stages, starting from 3, 5 and 10 percent.
The use of biodiesel at state-owned electricity firm PT PLN would also be increased gradually from 7.5 to 20 percent at the beginning of 2014.
'The policy will be explained in a government regulation that will be soon discussed at the House of Representatives,' said Mahendra. (ebf)
