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2024 biofuel subsidy funding needs 55% increase: BPDPKS
The government needs to boost its biodiesel subsidy budget 55.5 percent for a total allocation of Rp 28.5 trillion (US$1.75 billion) due to a projected gap in global prices for diesel and biodiesel this year, according to the oil palm funding agency's estimate.
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A worker uses a special tool on April 27, 2022 to haul fresh fruit bunches (FFB) at a palm oil plantation in Pekanbaru, Riau, for loading and then transporting to a crude palm oil processing factory. (Reuters/Willy Kurniawan)
T
he country’s biodiesel subsidy is expected to skyrocket this year on the back of rising prices and export costs for crude palm oil (CPO), according to an official at the Oil Palm Plantation Fund Management Agency (BPDPKS).
According to an estimate by the BPDPKS, the government would need to allocate around Rp 28.5 trillion (US$1.75 billion) this year to subsidize its program for B35, a biodiesel mix containing 35 percent fatty acid methyl ester (FAME) derived from palm oil.
This would entail a 55.5 percent markup on the Rp 18.32 trillion subsidy disbursed last year by the BPDPKS, which also collected Rp 32.29 trillion from CPO export levies over the same period.
“The agency is targeting Rp 27.3 trillion in palm oil export levies and Rp 28.5 trillion in biodiesel [subsidy] in 2024,” BPDPKS corporate head Achmad Maulizal Sutawijaya said on Sunday, as quoted by Bisnis.com.
The agency disbursed Rp 1.39 trillion for the subsidized biodiesel program in the first quarter.
Indonesia has the world’s highest proportion of palm oil in its mandatory biodiesel mix, which aims to reduce the largest Southeast Asian economy’s reliance on costly fuel imports.
Read also: Prabowo's biofuel plans face major challenges
