B20 Policy Saves US$1.66bn in Foreign Exchange

TEMPO.CO, Jakarta - The 20 percent blended biodiesel (B20) policy has saved US$1.66 billion (Rp23.6 trillion) of Indonesia’s foreign exchange reserves from January to July 2019, the Ministry of Energy and Mineral Resources has revealed. The savings occurred because nearly 100 percent of the mixed-energy fuel had been efficiently used during the period, Vice Minister Arcandra Tahar confirmed here, Monday.

The government had allocated 6.20 million kiloliters B20 or 44 percent of the total quota of diesel imports, the vice minister stated after attending a coordinating meeting in Jakarta.

From the total figure, the use of B20 had reached 97.4 percent, Tahar said.

In 2016, the Indonesian government introduced the mandatory use of mixed 20 percent biodiesel and 80 percent diesel fuel to the consumers as a response to the drastic fall of crude palm oil's price at the global market.

Indonesia, one of the largest CPO producers in the world, was hit by the commodity's markdown, and it had contributed to the country's trade deficit and current account deficit.

Therefore, the B20 mandatory policy was not only aimed to ease the deficit but also to reduce the dependency toward imported diesel fuel in the country.

ANTARA