Pertamina lowers biodiesel content to 1%

PT Pertamina, Indonesia’s sole retailer of biofuel, has cut its biodiesel blend to 1% from 2.5% due to rising biodiesel feedstock costs and a lack of government incentives, said a company official. The move will effectively slash the amount of 100% biodiesel supplied to Pertamina by local producers to 6,400 kiloliters this year from 16,000 kiloliters last year, said Paulus Tjakrawan, secretary-general of Indonesia’s Association of Biofuel Producers. “The high prices of palm oil have made it economically unfeasible for the company to continue selling a higher blend of biodiesel,” said Djaelani Sutomo, Pertamina’s vice president of marketing and trading. Biodiesel sold by Pertamina, known as Biosolar, is given a subsidy of 4,495 rupiah (US$0.48) a liter, similar to that given to regular diesel, but Pertamina has had to pay more to purchase biodiesel than petroleum diesel fuel, due to the higher production costs. (May 2, 2008)