PALMOILMAGAZINE, JAKARTA – The Ministry of Energy and Mineral Resources (ESDM) through the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE) has set the Market Index Price (HIP) for biodiesel in October 2024 at IDR 12,633 per liter, plus transportation costs. The new price is effective as of October 1, 2024, in accordance with a letter signed by the Director General of EBTKE with number T-3823/EK.05/DJE.B/2024 on September 29, 2024.
In an official statement quoted by Palmoilmagazine.com on Thursday (14/11/2024), Head of the Ministry of Energy and Mineral Resources’ Bureau of Communication, Public Information Services and Cooperation Agus Cahyono Adi confirmed the price determination in Jakarta on October 1.
He explained that the calculation of the biodiesel HIP is based on the guidelines set out in MEMR Decree No. 3.K/EK.05/DJE/2024, which regulates the HIP formula for biofuel blended with diesel fuel, while the transportation cost follows the provisions contained in Appendix I of MEMR Decree No. 153.K/EK.05/DJE/2024.
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In detail, the biodiesel HIP price formula is obtained from the average CPO (Crude Palm Oil) price of the previous month: HIP = (Average CPO KPB Price + USD 85/ton) x 870 kg/m³ + Transportation Cost. For the period August 25 to September 24, 2024, the average CPO price was set at IDR 13,211 per kilogram.
The value of USD 85 per MT is used to convert the raw material into biodiesel, while the figure of 870 kg/m³ is the density factor of biodiesel in liters. The exchange rate used is the average middle rate of Bank Indonesia during the same period, which amounted to IDR15,408.
The biodiesel HIP is an important reference for the domestic biodiesel sector, helping to stabilize the cost structure amid fluctuations in raw material prices. It also reflects Indonesia’s commitment to advancing the renewable energy agenda and supporting the palm oil-based biodiesel industry as a sustainable energy alternative. The biodiesel HIP pricing mechanism plays an important role in balancing biodiesel production costs and ensuring its competitiveness in the national fuel market. (P2)
