Ministry to issue decree on mandatory use of biodiesel
Friday, August 23 2013 - 10:58 AM WIB
The decree is part of the economic package planned by the government to cope with the current turmoil in the currency and stock market. The rupiah has lost more than 10 percent of its value against the dollar, while foreign investors are fleeing the country?s stock market, putting the currency under bigger pressure.
Susilo said the mandatory use of biodiesel aims to reduce the huge imports of oil fuels which analysts say is among the factors that weigh on the local currency.
Susilo said the decree will oblige state owned firm PT Pertamina to increase the portion of biodiesel in its diesel fuel to 10 percent and ?ask industrial sector and public utility PT Perusahaan Listrik Negara (PLN) to start using biodiesel as fuel.?
He said the country now produces 4.3 million kiloliters of biodiesel.
?If the 4.3 million kl biodiesel production is used (domestically), it will result in the reduction of oil fuel imports by about 80,000 barrels per day. That?s significant,? he said, who several days ago said Indonesia imported around 300,000 bpd of oil fuels to meet the domestic needs as the local refineries owned by Pertamina are not able to meet all the needs.
He admitted consumers are still reluctant to use biodiesel. However, since the use of biodesel fuel ?will become mandatory, they will have no choice,? he said, adding that the extensive use of biodiesel will in the end help the country?s CPO industry which is now struggling to cope with the falling price of its product. The increased use of biodiesel will help support CPO pricem, he explained.
He said PLN has agreed to use biodiesel for its diesel power plants and it will pay market price for the fuel.
Editing by Johannes Simbolon