Indonesia Plans to Increase Subsidy for Biodiesel, Ethanol

The Indonesian government is planning to increase the subsidy for biodiesel and ethanol to increase their viability in the wake of falling prices of oil.

The increased financial assistance is also brought about higher costs that producers are facing, teh Jakarta Post reported. The Energy Ministry is seeking a subsidy of Rupiah 5,000 (US$0.39) per liter for biodiesel, compared to Rp 1,500 per litre proposed in the state budget earlier. The ministry is seeking a Rp 3,000 per litre subsidy for ethanol, compared to the previously proposed Rp 2,000 per litre.

The government is proposing that 3.41 million kiloliters of biodiesel be mixed in diesel and 0.117 million kiloliters ethanol, which would total Rp 17.4 trillion in subsidies, the report said. That is a significant increase from the Rp 3.09 trillion previously planned for 1.58 million kiloliters of biodiesel.

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