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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
Biodiesel allotment decree was waited for by market
Indonesia had prepared to release higher biodiesel mix on Jan. 1
Palm oil criteria contract rose 1% after previous fall
Government goes for 50% biodiesel mix in 2026
(Recasts with energy minister’s remark)
By Bernadette Christina and Fransiska Nangoy
JAKARTA, Jan 3 (Reuters) – Indonesia Energy and Mineral Resources Minister signed a decree on Friday allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the market till the end of next month to adapt to the higher level of the fuel in the mix.
Indonesia, the world’s largest exporter of palm oil, had prepared to launch the necessary requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
”The ministerial guideline has actually been signed,” the minister Bahlil Lahadalia informed reporters, adding the federal government was working to increase the compulsory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel retailers will be till Feb. 28 to adapt to the B40 mix. She said the delay was due to the fact that of technical difficulties linked to subsidies for the fuel.
The non-implementation on Jan. 1. had led to a 2.6% drop in the Malaysian palm oil criteria agreement on Thursday. On Friday, it recuperated by around 1%.
Fuel retailers and biodiesel producers had said they were unable to prepare contracts for biodiesel circulation without the decree.
The biodiesel allowance for 2025 suggested an increase from 2024’s estimated biodiesel consumption of 12.98 KL, ministry data showed on Friday.
Of the overall allotment for this year, 7.55 million KL is for the public service obligation (PSO), which covers sectors such as public transport, whose sales will be subsidised by the nation’s palm oil fund.
”The remaining allowances will be cost market price. The non-PSO allotment is set at 8.07 million KL,” Bahlil said, adding the fund might not subsidise the cost space in between the palm oil and fossil fuels for the general allotment.
BPDPKS, the firm in charge of collecting and managing the palm oil funds, approximated in November B40 would need a 68% subsidy boost.
To assist finance that, Indonesia plans to increase its export levy for unrefined palm oil (CPO) to 10% from the present 7.5%, but for that to take place, another main guideline is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati; editing by John Mair, Savio D’Souza, Shri Navaratnam and Barbara Lewis)