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Jakarta Post

Blended diesel to miss target due to poor infrastructure

  • Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Fri, June 13, 2014   /  12:13 pm
Blended diesel to miss target due to poor infrastructure

The government'€™s 10 percent mandatory biodiesel blending policy will likely fall short of this year'€™s target due to poor infrastructure for distribution and biodiesel blending.

The Energy and Mineral Resources Ministry is estimating that the volume of blended subsidized fuel will only be 1.32 million kiloliters (kl) by year-end, or 90 percent of the 1.46 million kl target, according to the ministry'€™s bioenergy director, Dadan Kusdiana.

According to the ministry'€™s figures, only 446,935 kl of biodiesel had been blended into subsidized fuel as of the end of May.

Meanwhile, in the electricity sector, fuel blended with biodiesel reached 68,000 kl as of May 31, according to state power firm PT PLN'€™s oil and gas division head, Suryadi Mardjoeki.

No figures are available for the realization of biodiesel mix for non-subsidized fuel, but Dadan said the number remained below 10 percent.

'€œOne of the reasons causing the low realization is that companies still have to prepare infrastructure for distribution and biodiesel blending, particularly in the eastern part of Indonesia,'€ he said on Thursday.

The mandatory blending policy is part of the government'€™s attempts to reduce state expenditures on oil and diesel imports, which are bleeding the country'€™s current account.

The government began requiring diesel used for industry and transportation to contain 10 percent biofuel in September last year.

Last year, the mandatory biodiesel blending requirement helped lower diesel fuel imports by 1.05 million kl worth US$831 million.

Prior to the move, the country had implemented an obligation of 7.5 percent.

Total diesel fuel consumption is estimated to reach 34.14 million kl, while the volume of blended diesel fuel is targeted to total 3.96 million kl.

'€œThe government keeps trying to meet the target of the 10 percent mandatory blending requirement for non-subsidized fuel in part by increasing information dissemination and supervision,'€ Dadan said.

State oil and gas firm Pertamina vice president for retail fuel marketing Muhammad Iskandar could not be reached for comment on the progress of infrastructure that Pertamina was preparing to distribute and blend biodiesel to cover all areas nationwide.

But he earlier said the firm would blend biodiesel with fuel in larger terminals, such as Wayame terminal in Ambon, Maluku, before distributing the fuel to smaller terminals in Papua and other parts of Maluku.

Pertamina is also planning to hold a tender of a total 850,000 kl of fatty acid methyl ester (FAME) needed for blended biodiesel to supply Sumatra, Nusa Tenggara, parts of Kalimantan, Sulawesi and Papua.

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