Draft formula on biofuel sale price completed

The government has wrapped up a draft formula on the sale price of biofuels, which is expected to be included on the Amended Presidential Regulation No. 71, 2005 on the provision and distribution of particular types of fuels, Bisnis Indonesia reported Saturday.

?So the Presidential Regulation will regulate both fuels and biofuels,? said Director of Oil and Gas at the Energy and Mineral Resources Ministry Evita Herawaty Legowo in Jakarta recently.

According to Evita, the draft formula is still focused on the sale price of biodiesel. ?The formula on biodiesel should be completed first before we set a formula on the sale price of biothanol,? she said, adding that there was an abundant stock of raw material for biothanol.

The biofuel sale price formula set by the government referred to the biofuel price index in Southeast Asia. The formula has taken the availability of raw material, production costs, and margin for businesspeople into account, she said.

Evita said that the biofuel sale price formula serves as a driving force for oil palm, sugar cane and castor oil plants business people to consistently engage in developing the biodiesel raw materials.

Asked as to how the government would ensure the sufficient availability of raw material for biodiesel, she said that the government would issue a regulation obliging the businesspeople to supply the raw material domestically or domestic market obligation (DMO) scheme.

DMO was an effective way of making oil pal businesspeople to prioritize domestic market rather than export market, she said.

The government announced its plan to raise further the mandatory use of biodiesel to 10 percent next year following its move to increase the mandatory use of biodiesel to 5 percent from the previous 1-2.5 percent.

Meanwhile, Energy and Mineral Resources Minister Purnomo Yusgiantoro the significant drop in the global crude palm oil (CPO) price has led the oil palm business people to hold the sale, leaving the supply of the commodity abundant.

The drop in the global CPO price is seen by the government as a good momentum to expedite the use of biodiesel domestically. ?Previously Pertamina raised the mandatory use of bioduel to 5 percent. This will be increased to 10 percent. The drop in the CPO is good news for oil palm business people because with the abundant stock of oil palm, they can produce biodiesel which has additional value,? he said. (*)