(By indonesia-investments.com)

Although the Indonesian government has already announced that biodiesel subsidies have been raised to IDR 4,000 per liter (from IDR 1,500 per liter in 2014) and bioethanol to IDR 3,000 per liter (from IDR 2,000 last year) – in a move to protect the domestic biofuel industry as production costs exceed market prices amid the low global palm oil prices -, Indonesian biodiesel producers are eager to see the country’s biodiesel price is set based on a different benchmark than the Mean of Platts Singapore (MoPS).

Over the past four months the benchmark MoPS has been below USD $450 per ton, implying that Indonesian biodiesel producers have to absorb losses as palm oil prices are currently near USD $650 per ton. Association of Indonesian Biodiesel Producers (Aprobi) official Paulus Tjakrawan estimates that the losses that are incurred by Indonesian biodiesel producers (due to the low MoPS price) is about USD $900,000 per day.

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