Biodiesel Price Index for July 2019 Set Lower at Rp6,970 per Liter

MINISTRY of Energy and Mineral Resources (MEMR) has announced biofuel Market Price Index (MPI) for period of July 2019, included for biodiesel which is set at Rp6,970 per liter and bioethanol Rp10,255 per liter.

The MPI is set for B20 mandatory program which includes diesel fuel blending, both for special purposed fuels and general fuels. “The current MPI has come into effect since 1 July 2019 as stated on Letter of Director General of New, Renewable Energy and Energy Conservation Number 1726/12/DJE/2019,” Head of Communication, Public Information Service and Cooperation of MEMR Agung Pribadi said on press release, Friday (28/6/2019).

Biodiesel MPI for July 2019 is set at Rp6,970 per liter, lower Rp7 per liter than the previous month at Rp6,977 per liter weighed down by the decrease of the Crude Palm Oil (CPO) average price charged by Kharisma Pemasaran Bersama (KPB) for period 15 May to 14 June 2019 at Rp6,573 per kg.

The current biodiesel MPI is set using following pricing formula: MPI = (KPB’s CPO average price + US$100 per ton) x 870 kg/m3 + transport fee.  “The transportation cost is defined by following rule on the decree of the Minister of MEMR No. 91 K/12/DJE/2019,” Agung added.

Differently, MPI bioethanol is set higher as calculated by the following formula: (KPB average mollases price for 3-month period x 4,125 kg/L) + US$0.25/Liter. This calculation has generated biofuel MPI at Rp10,255 per liter for July 2019. “The currency conversion was based on average foreign exchange reference rates defined by Bank Indonesia for period of 15 May to 14 July 2019,” Agung said.

MEMR regulates the MPI for biofuels through ministerial decrees issued each month. The MPI formula is evaluated at least every six months by Directorate General of New Renewable Energy and Energy Conservation. ***