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Government Applies New Formula for Biodiesel Price

25 March 2015 14:02 WIB

Biodiesel Menghemat Subsidi Rp 4,9 Triliun

TEMPO.CO, Jakarta - The Energy and Mineral Resources Ministry have changed the formula to determine biodiesel’s market price index (HIP) in an effort to optimize distribution. The new formula is scheduled to be applied on April 1, 2015.

"Later on, Biodiesel distributors such as Pertamina will be assisted with the purchase of low price FAME [fatty acid methyl tester]," said Rida Mulyana, Director General of Renewable Energy and Energy Conservation on March 24, 2015.

Previously, the HIP for biodiesel is calculated based on crude palm oil (CPO) export cost added by US$188 (around Rp 2,436,574) for each ton of CPO.  The US $188 is the cost needed to process CPO into FAME, which is a liquid used to produce biodiesel.

For the new formula, the government has decided to reduce the FAME production cost to US$125 (around Rp 1,620,062) per ton.

ROBBY IRFANY

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