Implementation of Biodiesel 20 Will Affect Foreign Exchange Efficiency

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation
Date 20 Juli 2018
Category: News
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Coordinating Minister for the Economy, Cabinet Secretary, and Minister of Industry have a conversation after Limited Cabinet Meeting at the Presidential Office, Friday (20/7). (Photo: PR/Jay)

Coordinating Minister for the Economy, Cabinet Secretary, and Minister of Industry have a conversation after Limited Cabinet Meeting at the Presidential Office, Friday (20/7). (Photo: PR/Jay)

The implementation of Biodiesel 20 (B20) is believed to affect foreign exchange efficiency, particularly, in oil and gas sector which over the last six years has reached US$5.4 billion, whereas non oil and gas sector produces US$4.4 billion surplus.

Coordinating Minister for the Economy Darmin Nasution said that since the Limited Cabinet Meeting has decided to consistently apply the use of B20, the Government has a strong foundation to immediately eliminate current account deficit.

“Of course it cannot happen in a week since there will be preparation and transition periods,” Darmin said.

Currently, the Minister explained, Biodiesel 20 is implemented for public transports, in particular, whereas owners of Mercedes use Pertamina Dex. These public transports use PSO (Public Service Obligation) biodiesel amounting to 15 million kilolitres in a year.

Beside PSO, there is also non-PSO that can be used for trains, power plants, ships, and heavy equipment for mining. Based on the data of Ministry of Energy and Mineral Resources, the total is 16.2 kilolitres. This is what will be implemented now.” Darmin said while adding that the implementation of Biodiesel 20 is going to improve the price of CPO (Crude Palm Oil). This rise is expected to increase the income of palm oil farmers.

The Minister also said that this impact has been felt when B20 implemented for the first time in 2016. Only in 1-2 hours after the decision was made, the price was moving up.

 

5.5 Billion Dollar

The Coordinating Minister stated  that for long term, a technology for using biodiesel will be developed. Even, in certain countries there is an investment to develop technology for B100.

He also added that the demand of CPO is expected to rise significantly so Indonesia can reduce its dependence on European market.

For the record, the impact of the implementation has been calculated. For each working day, according to Minister of Industry, we save US$21 million.

 (DND/FID/ES) (MMB/YM/Naster)

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