Expert assesses B50 Programme will trigger multiplier effect on domestic economy

An economist from Universitas Brawijaya (UB) in Malang, East Java, Noval Adib, has assessed that the utilisation of palm oil as a raw material for biodiesel through the B50 Programme is capable of creating a multiplier effect for the domestic economy. “This drives the economy and is clearly positive for the state budget, but many sectors also move simultaneously, such as the palm oil sector itself, then the distribution sector, and the processing machinery sector,” he said in Malang on Saturday. According to him, the implementation of B50 can reduce dependence on crude oil imports, thereby preventing a bloating of state budget expenditure. The steps taken by the government are considered part of a strategy to optimise domestic potential, which will be a key factor in achieving energy self-sufficiency. “If we can be more self-sufficient by using palm oil-based fuel or crude palm oil (CPO), it will certainly ease the budget burden,” he stated. However, he reminded the government to remain meticulous and cautious in maintaining the supply balance in the domestic market, as CPO is a primary commodity for cooking oil production needed by the public. He emphasised that the government must manage supplies properly to avoid conflicts over raw materials between the biodiesel and food industries due to increased demand for the commodity. Ensuring supply certainty for both industries is a way to minimise the potential for inflation. Noval also highlighted the potential for hidden costs arising from any dynamics triggered by new policies, such as social impacts or imbalances between industrial sectors. “Standardisation, monitoring, control, and evaluation must be carried out with discipline when implemented, so that the B50 policy, which has the noble aim of reducing dependence on global oil, can be successful; its execution must also be correct,” he said. He added that the government must conduct education and outreach to the public, who are essentially fuel consumers. This step is intended to prevent confusion over economic issues, particularly those related to fuel oil (BBM) supply. “What is actually important is that the public knows fuel is available at an affordable price; it should not be that using B50 turns out to be more expensive than regular diesel, because economically that would burden the people,” he concluded.