Indonesian rule change set to cut fuel imports
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A regulation issued on Wednesday that requires a higher biodiesel use percentage is expected to cut the country's fuel imports by at least 100,000 barrels per day for the rest of the year, a top official has said.
The Energy and Mineral Resources Ministry’s director general for renewable energy and energy conservation, Rida Mulyana, said on Wednesday that the new ministerial regulation was expected to reduce the import of diesel fuel.
“[The import of diesel fuel] has partly contributed to the widening of the current account deficit and thus the new ministerial regulation on biodiesel, which was issued on Wednesday, is expected to help reduce it,” he said in a message sent to The Jakarta Post.
With the regulation, the government pushes down diesel fuel imports by raising the proportion of biodiesel in fuel from the current 2.5 per cent to at least 10 per cent, while also making the fuel-blending requirement mandatory.
The regulation aims to support the economic stimulus package announced last week to spur economic growth and stabilise the weakening Indonesian currency.
The new ministerial rule would effectively replace the existing 2008 ministerial regulation on biofuel, which had mandated that all oil-based fuels must be mixed with biofuel.
According to data from the ministry, the realisation of the 2008 ministerial regulation was still below expectations as biodiesel utilised in subsidised diesel fuel only accounted for 7.5 per cent of the total, while bioethanol only covered 2 per cent of total subsidised gasoline.
