Govt must lead campaign for alternative fuels

The continuing trend of high global oil prices has left the Indonesian government facing a dilemma as raising fuel prices will be met with strong opposition while keeping prices as they are will cause the budget to be derailed.

Indonesia has huge amounts of untapped natural resources that are capable of providing alternative fuels for the automotive sector -- both public and private -- but the government still lacks leadership and appropriate policies.

In the past, many taxi companies in Jakarta installed LPG conversion kits in their vehicles -- allowing the drivers to switch between gasoline and LPG or bi-fuel -- only to find that there were not enough LPG filling stations in Greater Jakarta.

Recently, Indonesian scientists and companies have been promoting the use of palm oil-based biodiesel. However, there has been only a lukewarm response from the government.

"With such huge natural resources, the Indonesian government only needs to spell out its policies for alternative fuels and show strong leadership to the automotive industry," PT Ford Motor Indonesia's Richard Baker told The Jakarta Post recently.

"The government should also provide a number of incentives, such as tax reductions for cars using alternative fuel," he added.

Baker was speaking on the sidelines of a Ford Focus test drive event at the Bira Race Circuit in Pattaya, Thailand, on Aug. 3 and Aug. 4.

"Without clear policies and incentives, automakers may be reluctant to introduce engines that use alternative fuel as they are more expensive than ordinary engines.

"For gasohol, for example, we have to use stainless steel pipes instead of ordinary steel pipes, and need a computer to monitor the mixture of alcohol and gasoline," Baker said.

He gave as an example the Ford Taurus, which can run on fuel of up to E-85 standard, which means 85 percent alcohol and 15 percent unleaded gasoline. However, it costs US$500 more than an ordinary gasoline model.

Cars like the Ford Taurus are also known as Flexible Fuel Vehicles (FFV) as they can run on any mixture of gasoline and alcohol from E-10 up to E-85. The term FFV can also be applied to vehicles running on the same mixtures of biodiesel, from B-10 up to B-85.

"We had to offer a $500 discount so the price of the car would be the same as those with gasoline engines."

Baker, however, emphasized that the technology was already there in the market and PT FMI could easily provide the cleaner engines as long as there were incentives for car buyers.

"Maybe Indonesia could start by using E-10 instead of jumping ahead to E-85. As soon as the gasohol is more readily available, we can increase the proportion of alcohol.

Baker, however, did not say that Indonesia should rely solely on gasohol, but rather should look for the best option considering all the resources available.

"With such a huge production of palm oil, Indonesia could also use bio-diesel to reduce diesel consumption. Indonesia could also opt to use gas for its public transportation, buses and taxis.

"This is what the Indonesian government needs to do: map all the available resources and provide the guidelines on how to use them."

The automotive industry, he said, will do what is necessary provided government policies are clear. -- The Jakarta Post