Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia said\nhis ministry is preparing a pricing formulation and incentive scheme,\nparticularly to support the bioethanol blending programme for petrol\nfuel.<\/p>\n
Bahlil explained that the bioethanol financing mechanism will not be\nentirely the same as the biodiesel funding scheme through the Palm Oil\nFund Management Agency (BPDP). Nevertheless, the government is drafting\na formula to keep bioethanol prices competitive without harming either\nindustry or farmers.<\/p>\n
He noted that bioethanol uses different raw materials from biodiesel.\nBiodiesel is produced from palm oil via Fatty Acid Methyl Ester (FAME),\nwhich is then blended with diesel, whilst bioethanol comes from\nagricultural commodities such as maize, cassava and sugarcane, which are\nthen blended with petrol.<\/p>\n
\u201cFor ethanol, there are three feedstocks: maize, cassava and\nsugarcane. Sugarcane usually goes into molasses. Now, we will set their\nprices directly, but we will create a sort of economical price so that\nfarmers also earn a good income,\u201d Bahlil said when met at the Ministry\nof Energy and Mineral Resources, quoted on Tuesday (4\/8\/2026).<\/p>\n
Bahlil revealed that the government plans to set the bioethanol price\nat a level that still provides profit for farmers. At present,\nbioethanol stands at around Rp11,000 per litre, whilst petrol reaches\nabout Rp16,000 per litre, so the use of bioethanol is still considered\neconomical.<\/p>\n
However, he acknowledged that challenges would arise if global oil\nprices fall, making petrol cheaper than bioethanol. In such a situation,\na price gap would emerge that needs to be anticipated through the\nmechanism currently being drafted by the government.<\/p>\n
\u201cBut when world oil prices fall, for example to Rp9,000 or Rp10,000,\nwith ethanol at Rp11,000, there would be a difference of Rp1,000. Well,\nthis is what we are going to shape. We will create a sound formulation\nin the interests of industry, farmers and the state,\u201d he said.<\/p>\n
Earlier, President Prabowo Subianto declared that the government\nwould accelerate the development of bioethanol-based biofuel. Indonesia\nis even targeted to follow in the footsteps of India and Brazil in\nutilising ethanol as a petrol blend.<\/p>\n
Prabowo made the remarks while leading the Simultaneous Grand Harvest\nAcross Indonesia Together with the TNI in Malang, East Java, on Friday\n(17\/7\/2026).<\/p>\n
Prabowo said Indonesia currently has the capability to move towards\nE10, or petrol with a 10% ethanol blend. Indonesia even has the\npotential to raise the ethanol blend content up to E20.<\/p>\n
\u201cI saw at the exhibition earlier that we are already able to move\ntowards E10, ethanol 10, meaning petrol will later be blended with 10%\nethanol, but earlier the officials said we can reach E20. It requires\nfactories; the one we own now is just one factory, so I decided we will\nbuild at least 30 factories, if necessary up to 50 factories,\u201d he\nsaid.<\/p>\n
Prabowo then compared the development of bioethanol use in several\ncountries. According to him, India has already implemented E20, whilst\nBrazil has even used E100, or fuel based on pure ethanol.<\/p>\n
\u201cIndia is already at E20, India is already at E20, Brazil is already\nat E100. How could Indonesia not be able to do it? Indonesia can, right?\nCan we? We can,\u201d he said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/boosting-bioethanol-petrol-development-bahlil-prepares-pricing-scheme-1785826271", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }