B20 Companies Attempt to Avoid Penalty

There continues to be a hot topic of discussion over the penalty issue on the implementation of expanded B20 mandatory program. At least, this issue has been of concern to fuel companies and biofuel companies. On the socialization forum which was organized by the Indonesian Oil Palm Estate Fund (BPDPKS) in Palembang, South Sumatera (10/1/02018), some biofuel and fuel companies, as well as other stakeholders raised questions about the penalty procedure. Previously, the government has threatened to impose sanctions to companies who fail to distribute a 20-percent blended biodiesel called B20, the mandatory usage of which came into effect on 1 September 2018. The penalty are various from fine of Rp6.000 per liter to revocation of permits. It would be imposed on any companies that fail to implement provisions stipulated in the regulation, whether they were a fuel companies or biofuel companies. One of the issue is about delay in distributing Fatty Acid Methyl Esters (FAME), the biofuel material to be blended with diesel fuel in order to produce B20. “We didn’t receive FAME supply on time so that we couldn’t blend and distribute B20 on time. As a result, we delivered B0 for a change which is forbidden for us to do so. In this situation, who is going to be punished?” one of socialization participant asked. In respond to the question, Yuli Rachwati, Director of Oil and Gas Downstream Business Development at Energy and Mineral Resources Ministry, explained that penalty is not given automatically when a company makes a mistake. But it has to be verified in advance to make sure what actually happens. According to her, a similar case had happened at a fuel terminal in eastern Indonesia, where the terminal didn’t receive FAME on time so that it deliver B0 to public. “We understand that we have to avoid fuel scarcity at any cost, so that we have to deliver B0. We have to conduct verification and checks to detect what to be the cause of the delay. That means we don’t punish every companies that fail to supply FAME without checks and verification. The point is, if it is not because of force majeure, there will be no penalty,” Yuli said. She also explained that penalty is imposed based on verification and checks by a team from Ministry of Energy and Mineral Resources and also by monitoring team. “At any rate, fuel companies are given penalty if they fail to blend fuel. Meanwhile, biofuel companies are given penalty if they fail to meet the contract on fuel allocation, time, and biofuel specification,” Yuli said. The socialization forum which organized by BPDPKS in Palembang was the second after in Batam, Riau. It is also scheduled to be held in Surabaya, Makassar, and Balikpapan. ***