B50 Biodiesel Rollout Leads to Diesel Surplus in Indonesia

Indonesia is expected to experience a surplus in diesel fuel supply as a result of the implementation of the 50% biodiesel mandate (B50). Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia explained that the addition of domestic refinery capacity and the high biodiesel blend are driving the excess domestic diesel supply. The diesel surplus is estimated to reach 3 to 4 million kilolitres (KL).

“Indeed, in our calculations with Pertamina, a surplus is likely to occur in the future. Because the optimisation of our refinery in East Kalimantan produces 5.6 million KL. That is an addition. So a surplus will occur. The surplus is estimated, and this is still being calculated, to be between 3-4 million KL,” Bahlil said on the sidelines of the Mandatory B50 Launch event at Rest Area KM 57 of the Jakarta-Cikampek Toll Road, quoted on Friday (10/7/2026).

With the abundant diesel stock, Indonesia is no longer importing diesel fuel from other countries, particularly for the C48 specification. The government plans to convert the excess diesel supply to meet the demand for aviation fuel (avtur), with the construction of a production facility targeted to begin by the end of this year.

“The next stage is that we will push for the construction of avtur. Because the raw material for avtur is almost the same as diesel. Now, Pertamina and I are creating a roadmap, and God willing, by the end of 2026 we can start the construction of our avtur plant,” he added.

The government has provided a three-month transition period for all fuel business entities to adjust stocks in their respective storage facilities. This aims to ensure a smooth shift from B40 to B50 without disrupting energy distribution to the public.