Market Index Prices of Biodiesel and Bioethanol of December 2019

MINISTRY OF ENERGY AND MINERAL RESOURCES REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 698.Pers/04/SJI/2019

Date: 9 December 2019

Market Index Prices of Biodiesel and Bioethanol of December 2019

Ministry of Energy and Mineral Resources (EMR) through its Directorate General of New, Renewable Energy and Energy Conservation (NREEC) sets the Market Index Prices of Biofuels (HIP BBN) of December 2019. Biodiesel is set at Rp7,914/liter, while bioethanol at Rp10,348/liter.

Head of Bureau of Communication, Public Information Services, and Cooperation, Agung Pribadi, says biodiesel HIP of December 2019 rises by Rp757/liter compared with the previous month price of Rp7,157/liter, bioethanol price drops by Rp51/liter from the previous price of Rp10,297/liter.

"These prices start to apply from 1 December 2019 in accordance with letter of Director General of New, Renewable Energy and Energy Conservation (NREEC) Number 3375/12/DJE/2019," Agung said in Jakarta, Monday (9/12).

Agung adds that the biofuel prices are used in the implementation of mandatory B20 (a blend of 20% biodiesel and diesel oil) and apply for all biodiesel and diesel oil blends, sold as both special designated fuels and general fuels.

The rise in biodiesel prices are due to the increase in the average Crude Palm Oil (CPO) price of Kharisma Pemasaran Bersama (KPB) in the period 15 October-14 November 2019 to Rp 7,690/kg from the previously Rp6,813/kg.

According to Regulation of Minister of Energy and Mineral Resources (EMR) Number 41 of 2018 on Supply and Utilization of Biodiesel in the Framework of Financing by Oil Palm Plantation Fund Management Agency, the palm oil incentive or biodiesel funds are used to close the gap between Solar diesel HIP and biodiesel HIP so that the price of Biosolar (special designated) on the market remains at Rp5,150 per liter.

The incentive will only be given to biodiesel producers if the biodiesel HIP is higher than the Solar diesel HIP. The HIP BBN for Biodiesel is calculated with the formula: HIP = (Average CPO of KPB + 100 USD/ton) x 870 Kg/m3 + Freight costs. The freight costs are subject to the provisions of Decision of Minister of EMR No. 148 K/12/DJE/2019.

Bioethanol HIP rises after calculation was made according to the set formula, namely (Average sugar cane drops of KPB of a 3-month period x 4,125 Kg/L) + USD0.25/Liter, resulting in a value of Rp10,348/liter for December 2019. For this period, the average price of KPB's sugar cane drop is Rp1,656/kg.

The exchange rate used is the average mid-market exchange rate of Bank Indonesia in the period 15 October- 14 November 2019.

The HIP BBN is determined monthly, while evaluation is made semi-annually by Director General of NREEC. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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