Expert assesses B50 Programme will trigger multiplier effect on domestic economy
Many sectors will move simultaneously, such as the palm oil sector itself, then the distribution sector, through to the processing machinery sector.
Malang, East Java (ANTARA) — Economics expert Noval Adib from Brawijaya University (UB) in Malang, East Java, believes that using palm oil as a biodiesel feedstock under the B50 programme can generate a multiplier effect for the domestic economy.
“This drives the economy and is clearly positive for the state budget, but many sectors will also move at the same time, such as the palm oil sector itself, then the distribution sector, through to the processing machinery sector,” Noval said in Malang on Saturday.
According to him, the implementation of B50 can reduce dependence on imported crude oil, thereby preventing the state budget from ballooning.
He described the steps taken by the government as part of a strategy to optimise domestic potential, which will be a key element on the path to energy independence.
“If we can become more self-reliant by using palm oil or crude palm oil (CPO) as fuel, it will certainly reduce the budget burden,” he said.
Nevertheless, he reminded the government to remain vigilant and careful in maintaining the balance of supply in the domestic market, given that CPO is the main commodity for producing cooking oil needed by the public.
According to him, the government needs to manage supplies well, so that a tug-of-war over raw materials between the biodiesel and food industries does not arise as demand for the commodity increases.
Supply certainty for both industries is the way to minimise the potential for inflation.
Noval also emphasised the potential hidden costs in every dynamic arising from new policy, for example in the form of social impacts or disparities between industrial sectors.
“Standardisation, monitoring, control and evaluation during implementation must be carried out with genuine discipline, so that the B50 policy, whose noble aim is to reduce dependence on global oil, can succeed — its execution must also be right,” he said.
He said the government must provide education and public outreach to the public, who are ultimately the consumers of fuel.
This step is intended to prevent confusion over economic issues, particularly those related to fuel oil (BBM) supplies.
“What matters most to the public is that fuel is available at an affordable price. It must not be the case that B50 ends up costing more than regular diesel, because economically that would burden the people,” he said.