Subsidised Biosolar Price Rises to IDR 6,800 a Litre, B30 Blend Unchanged

Jakarta — The government raised the price of subsidised diesel (Biosolar) from IDR 5,150 to IDR 6,800 a litre, an increase of IDR 1,650 or about 32%, effective Saturday (3/9/2022) at 14.30 WIB. President Joko Widodo announced the move alongside adjustments to Pertalite, from IDR 7,650 to IDR 10,000 a litre, and Pertamax, from IDR 12,500 to IDR 14,500 a litre. Biosolar is the subsidised diesel containing a 30% blend of palm-based biodiesel (B30).

Details of the Price Adjustment

Energy and Mineral Resources Minister Arifin Tasrif spelled out the three fuels that were adjusted: Pertalite rose from IDR 7,650 to IDR 10,000 a litre, subsidised diesel from IDR 5,150 to IDR 6,800 a litre, and Pertamax from IDR 12,500 to IDR 14,500 a litre. The new prices took effect simultaneously at 14.30 WIB the same day. For non-subsidised fuels, prices varied by region.

Why: Subsidies Swelled Threefold

President Joko Widodo said the decision was taken "in a difficult situation" and was the government's last resort to redirect fuel subsidies. He said the 2022 fuel subsidy and compensation budget had tripled from about IDR 152 trillion to IDR 502.4 trillion and would keep rising.

More than 70% of the subsidy, the President said, was enjoyed by the better-off. Part of the subsidy budget was then redirected to direct cash assistance (BLT) of IDR 12.4 trillion for 20.65 million households and wage subsidy assistance (BSU) of IDR 9.6 trillion for 16 million workers.

B30 Remains the Subsidised Diesel Blend

The price increase does not change Biosolar's composition. Subsidised diesel remains a 30% blend of palm-based biodiesel (FAME) and 70% petroleum diesel, in line with the B30 mandate in force since 1 January 2020. What changed is the base price of subsidised diesel, while the national biodiesel blending programme continues.