SUBSIDY CUT NOT TO REDUCE DIESEL OIL SUPPLY

By Andi Abdussalam

Jakarta, June 11 (Antara) - The government's plan to cut its diesel oil subsidy will have no impact on the volume of diesel oil supplies which currently amount to about 16 million kiloliters.          However, Energy and Mineral Resources (ESDM) Minister Sudirman Said has not given any assurance about whether it will lead to lesser consumption of biodiesel, being intensively promoted by the government.          In the 2016 State Budget (APBN 2016), a provision of Rp1,000 per liter has been kept for diesel oil subsidy. The Draft 2016 Revised State Budget (RAPBNP 2016) will have a subsidy figure based on the cut applied.          Finance Minister Bambang Brodjonegoro said the fixed diesel oil subsidy of Rp1,000 per liter in the APBN 2016 will be reduced to Rp350 per liter in the RAPBNP 2016.          As a result of the cut, the fuel oil and liquefied petroleum gas subsidies in the APBNP 2016 will amount to Rp40.63 trillion, down from Rp63.68 trillion in the APBN 2016.          Earlier, ESDM Minister Sudirman Said informed Commission VII on energy affairs of the House of Representatives (DPR) about the government's plan to cut diesel oil subsidy by Rp650 per liter and that it will form the basis of the figure in RAPBNP 2016.      Sudirman stated the government was yet to discuss the impact of diesel oil price after the subsidy cut, but it is expected to adjust itself to the market price within a three month period.          The minister admitted that the government has made significant corrections in the APBN 2016. In the energy sector, the world oil price slide was the main factor for budget adjustment.

PERTAMINA PREDICTS SURPLUS IN DIESEL PRODUCTION

By Andi Abdussalam

Jakarta, Nov 28 (Antara) - Under obligation to implement the government's mandatory biofuel mix of 20 percent diesel fuel, state-owned oil/gas firm Pertamina has predicted that it will have pure diesel production surplus of about 400 thousand tons per month.          The government, through the Energy and Mineral Resources Ministry (ESDM), has over the past two years issued a regulation requiring Pertamina to implement a mandatory biofuel mix of diesel oil.          The mandatory biofuel mix policy is expected to have broad implications such as the absorption of 5.3 million kiloliters of biodiesel, which is some 4.8 million tons of the country's crude palm oil (CPO) production, and the retrenchment of US$2.54 billion of foreign exchange from fossil fuel import cuts.          The government through the ESDM minister's regulation number 12/2015 has raised the mandatory biofuel mix of diesel from 10 percent (B10) in 2014 to 15 percent (B15) this year.          It is planning to raise it further to 20 percent (B20) in 2016.          For this purpose, Pertamina established a partnership with 11 biodiesel producers to meet the need for the fuel from November 2015 to April 2016.