Source: APCC Cocommunity Newsletter
Indonesian government has proposed to allocate a subsidy for the distribution of biofuel of Rp2,000 to Rp2,500 per liter in the 2011 budget, compared to the Rp2,000 per liter granted this year. “The subsidy would only be given when the biofuel market price is higher than the market price for oil-based fuel” said Darwin Zahedy Saleh, Indonesia’s Energy and Mineral Resources Minister, adding that the subsidy was needed to ensure that a fall in prices would not cause financial losses to companies already involved in the production of biofuel. The country has been blending palm oil-based biodiesel into fossil diesel since October 2008 at a level of 5%.
Data from the Directorate for Oil and Gas showed that the country’s production capacity reached 4.1 million kilolitres per day for biodiesel and 120,000 kilolitres per year for ethanol. The revised 2010 state budget allocates the quota for subsidized fuel consumption at 36.5 million kilolitres this year, but the ministry estimates the actual consumption could reach 40.1 million kilolitres. In 2011 depending on how successful the subsidy program turns out to be. (UCAP Bulletin)
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