The Indonesian government will need to pay US$1.75bn (Rp 28.5tn) to meet the funding gap for the country’s B35 biodiesel blending programme, according to an official from the Oil Palm Plantation Fund Management Agency (BPDPKS) quoted in a Jakarta Post report.
At 55.5% higher than last year’s subsidy, the increase was due to a projected gap in global diesel and biodiesel prices this year, the 29 April report said.
“The agency is targeting US$1.68bn (Rp 27.3tn) in palm oil export levies and US$1.75bn (Rp 28.5tn) in biodiesel [subsidy] in 2024,” BPDPKS corporate head Achmad Maulizal Sutawijaya was quoted as saying by local news agency Bisnis.
The agency paid out US$8.5M (Rp1.39tn) for the subsidised biodiesel programme in the first quarter.
The Indonesian government introduced mandatory B35 blending nationwide in August 2023 in a bid to reduce the country’s reliance on fuel imports.
Indonesia has the world’s highest proportion of palm oil in its mandatory biodiesel blend.
