PLN to get biodiesel subsidy

Starting October of this year, the government will allocate subsidy for state-owned electricity firm PT PLN in purchasing biodiesel to help ease the financial burden of the company, and avoid passing on the cost burden to consumers.

Head of the Indonesian Oil Palm Estate Fund (BPDP) Bayu Krisnamurthi said Tuesday that the allocation of biodiesel subsidy for PLN is in line with a mandate for PLN and state-owned oil and gas firm PT Pertamina to increase biodiesel absorption next year so as to reduce dependency on imported fuel. Pertamina has been enjoying the biodiesel subsidy.

Biodiesel consumption this year is estimated at 1.2 million kilo liters, of which 710,974 kl to be absorbed by Pertamina, 276,369 by PLN, and 224,939 by industries, Kontan reported.

Biodiesel absorption next year is projected to jump to 5.14 million kl, Bayu said, as the mandatory biodiesel mix of Pertamina has been raised to 20 percent from the current 15 percent, and PLN?s to 30 percent from the current 25 percent. Bayu estimated that Pertamina will absorb about 2.8 million kl of biodiesel next year, and PLN 1.2 million kl. (*)