The Indonesian Ministry of Ministry of Energy and Mineral Resources has allocated 6.19 million kilolitre (kL) of unblended biodiesel to 18 fuel distribution companies under the framework of the B20 programme for 2019. However, the bulk of this amount has been attributed to the state-run energy company PT Pertamina, which recently announced plans to develop a new bio-refinery project which could help the country save around 225,000 bbl/d of fuel imports once built.
This amount is much higher then in 2018 due to the introduction of the B20 regulation, which was unveiled in August 2018 and required all regular diesel fuels used in the country to contain at least a 20% biodiesel component starting from September 2018. The aim of the scheme is to give the country more leeway to subsidise the price gap between biodiesel and petroleum-based diesel fuel.
Indonesia imports a significant portion of its crude oil requirements. The recent oil prices rise on international markets combined with the fall of the local currency (rupiah) has made imports more expensive. The introduction of the B20 diesel blending regulation is slated to boost domestic palm oil consumption, support the rupiah and help to reduce diesel fuel imports.