Govt to announce biofuel price formula in May

The government will decide on the basic price formula for biofuel in May after a technical team has completed their study result.

?The plenary meeting (of the technical team) concerning this matter will be hold in mid April,? Director General of Oil and Gas, Evita H. Legowo was quoted as saying in the directorate's website.

Besides studying the price formula, the technical team will also study the timeframe for the formula use, price reference, and exchange rate.

?Over time, the formula will be like ICP, as it will be stipulated monthly and will be evaluated in certain period of time,? Evita said.

The price will used as the benchmark for buyers, sellers as well as the Ministry of Finance in calculating biofuel subsidy.

The House of Representatives` Commission VII has approved Ministry of Energy and Mineral Resources? proposal to provide subsidy for biofuel sale if its basic price is higher Rp 1.000 (1US$ = Rp 11,480) a liter on average than BBM basic price (MOPS).

The Commission and the government agreed to allocate Rp 831.43 billion subsidy for 831.427 kiloliter of bioethanol and biodiesel this year. However, the government still needs approval from the House`s Budget Committee.

According to the website, the national biofuel production capacity now reaches 2.9 million kiloliter of biodiesel and 215,000 kiloliter of bioethanol a year. (denny)