Pertamina temporarily halts expansion of biofuel sales

State owned oil and gas company Pertamina has temporarily halted the expansion of the company's biofuel sales due the lack of the supply of the raw materials.

Hanung Budya, Pertamina's deputy director for marketing and trading, said Friday that Pertamina initially planned to sell its biofuel brand "Biosolar" in 181 pump stations in Jakarta and other major cities in Java this year.

"But we can only sales the Biosolar in 131 pump stations because the lack of the supply for fetil acid methyl ester (FAME), the raw material used as the blend for the biofuel product," he said.

Pertamina began to sell Biosolar, a blend of diesel oil (95 percent) and FAME (five percent) early this year to support the government's campaign to use environmentally friendly fuel in the country's major cities.

He said that Pertamina needs at least 200,000 tons of FAME to be able to meet the target to reduce the use of diesel oil of about 11 million kiloliters a year but PT Eterindo Wahanatama Tbk, the sole supplier, is only able to provide 100,000 tons of FAME.

According to him, besides the lack of supply, the price of FAME is still relatively too expensive. The price of FAME is about Rp 5,400 per litter, or Rp 400 higher than the price of crude oil, he added. "By selling Biodiesel, our profit declines by Rp 20 per liter," he said. (Godang)