Observer Says Rising Global Oil Prices Are Momentum to Accelerate B50 Policy Implementation

Jakarta (ANTARA) — Rising global oil prices caused by escalating geopolitical tensions in the Middle East are viewed as an opportune moment to accelerate the implementation of a 50 per cent biodiesel policy, or B50.

Tungkot Sipayung, Executive Director of the Palm Oil Agribusiness Strategic Policy Institute (PASPI), stated that B50 is a blended fuel comprising 50 per cent diesel and 50 per cent plant-based fuel derived from palm oil.

“Developing renewable energy as a substitute for fossil fuels has become crucial for reducing dependence on fossil fuel imports,” he said in a statement in Jakarta on Wednesday.

According to him, rising oil prices could disrupt the stability of domestic diesel supply whilst simultaneously triggering inflation increases and placing additional burden on the state budget (APBN).

Sipayung explained that the Middle East region, particularly the energy distribution corridor through the Strait of Hormuz, supplies approximately 20–30 per cent of global fossil fuel energy needs, including that used by Indonesia. This situation has the potential to significantly increase the financing burden of energy imports.

Indonesia, as a petroleum importer, will be forced to pay more than twice the previous price for imported fossil oil due to the conflict in the Middle East, he continued.

Sipayung stated that the Indonesian Government already possesses sufficient experience to implement mandatory B50 biodiesel. The mandatory biodiesel ecosystem that has been developed through to B40 (a blend of 40 per cent biodiesel and 60 per cent diesel) represents an important foundation for transitioning to B50 or higher.