InfoSAWIT, JAKARTA – The Ministry of Energy and Mineral Resources (ESDM), through its Directorate General of New, Renewable Energy, and Energy Conservation (EBTKE), has set the Market Index Price (HIP) for biodiesel for October 2024 at IDR 12,633 per liter, plus transportation costs. This new rate took effect on October 1, 2024, according to a letter signed by EBTKE Director General under number T-3823/EK.05/DJE.B/2024 dated September 29, 2024.
Agus Cahyono Adi, Head of the Communication, Public Information Services, and Cooperation Bureau at the Ministry of Energy and Mineral Resources, confirmed this pricing update in a public statement on November 14, 2024, citing the official implementation in Jakarta as of October 1.
The HIP calculation for biodiesel follows guidelines stipulated in Ministerial Decree No. 3.K/EK.05/DJE/2024, which outlines the price formula for biofuels blended with fossil diesel. Transportation costs are determined per Appendix I of Ministerial Decree No. 153.K/EK.05/DJE/2024.
The detailed HIP formula for biodiesel is derived from the average price of Crude Palm Oil (CPO) from the previous month:
HIP = (Average CPO KPB Price + USD 85/ton) x 870 kg/m³ + Transport Cost.
For the period from August 25 to September 24, 2024, the average CPO price was set at IDR 13,211 per kilogram. The USD 85 per metric ton (MT) component accounts for the conversion of raw materials into biodiesel, while the density factor of 870 kg/m³ reflects biodiesel volume in liters. The exchange rate used is the average midpoint exchange rate from Bank Indonesia over the same period, recorded at IDR 15,408.
The HIP for biodiesel serves as a crucial benchmark for Indonesia’s biodiesel industry, stabilizing cost structures amid fluctuating raw material prices. This price-setting also underscores Indonesia’s commitment to advancing renewable energy and supports palm oil-based biodiesel as a sustainable alternative energy source. The HIP mechanism plays a key role in balancing biodiesel production costs while ensuring competitiveness within the national fuel market. (T2)
