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Jakarta Post

High palm oil price delays Indonesia’s B40 biodiesel plan

  • Norman Harsono

    The Jakarta Post

Jakarta   /   Mon, February 22, 2021   /  08:07 pm
The Jakarta Post Image
President Joko “Jokowi” Widodo (left, in red), state-owned oil and gas holding company Pertamina president director Nicke Widyawati (center, wearing yellow veil) and several ministers symbolically kick off the B30 policy at a Pertamina gas station on Jl. MT. Haryono in Jakarta on Dec. 23, 2019.(JP/Norman Harsono)

Doubts have emerged over Indonesia’s plan to roll out the use of B40-type biodiesel by July this year as the high price of crude palm oil (CPO) renders such fuel uneconomical. Stakeholders have said that Indonesia’s biodiesel subsidy budget for this year, sourced from the CPO export levy and estimated at Rp 46 trillion (US$3.29 billion), was insufficient for the B40 program given the high current CPO price, which has rallied to around $1,080 per ton this year from around $530 in May 2020. “Right now, price is the main hurdle for B40. The sharp rise in CPO prices has made biodiesel prices rise significantly as well,” energy economist Alloysius Joko Purwanto, who penned numerous articles on transportation economics, told The Jakarta Post on Thursday. Joko, a researcher with the Economic Research Institute for ASEAN and East Asia (ERIA), said the difference ...