MEMR issues regulation on biofuel pricing
Friday, April 25 2014 - 01:44 AM WIB
The Ministry of Energy and Mineral Resources (MEMR) has issued a new regulation on pricing for biofuel blended with oil fuels.
The MEMR Regulation No. 2185 K/12/MEM/2014, issued on Thursday, is the second amendment to the MEMR Regulation No. 0219 K/12/MEM/2010 on Market Price Index for Biofuel to Be Blended with Certain Types of Oil Fuels.
Under the new regulation, biodiesel price should be determined based on Mean of Platts Singapore (MOPS) average published prices for gas oil over the past one month plus 3.48 percent of the MOPS with the following guidelines
1. The price is effective for biodiesel blended with certain types of oil fuels.
2. The price includes transportation costs from producers? supply points to oil fuel main terminals.
With regards bioethanol, the price should be determined based on Argus? average published prices for ethanol FOB Thailand over the past one month plus 5 percent of local production weighted index with a conversion factor of 788 kg/m3.
Director General of New and Renewable Energy and Energy Conservation Rida Mulyana said the MEMR Regulation No. 24/2013 issued in August last year which obliges industries and power plants to use biofuels as a mixture to oil fuels has brought a positive impact, particularly on the state?s foreign reserve position.
As a result of the regulation, Indonesia could reduce its oil fuel imports by an average 126.761 kiloliters per month during the period of September 2013 through February 2014, he said. In comparison, before the issuance of the regulation, Indonesia could only cut its oil fuel imports by 63,524 kl per month or half of the current amount.
The ministry has issued the new regulation on biofuel pricing with the purpose of reaching the target of biofuel mandatory use set in the MEMR Regulation No. 23/2013, he said.
?The new pricing formula is expected to increase the use of biofuels to support the policy to diversify energy sources and the growth of new investment in biodiesel. There are people who resist the policy, but we have provided explanations. We also call on the Ministry of Industry to give supports. They (the Ministry of Industry) are also convinced it (the policy) will work. If such policy can work in other countries, why will it not work in our country?? he said.
Editing by Johannes Simbolon