JAKARTA, PALMOILMAGAZINE – Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has officially set the Market Index Price (HIP) for biodiesel at IDR 14,562 per liter for July 2026, excluding applicable transportation costs. The price serves as the official reference for implementing the country’s mandatory biodiesel blending program, which took effect on July 1, 2026.
According to information obtained by Palmoilmagazine.com from the Ministry of ESDM on Monday (July 6), the pricing decision was issued by the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE) through Letter No. B-1924/EK.05/DJE.B/2026, dated June 29, 2026, and addressed to the Director General of Budget at the Ministry of Finance.
The ministry maintained the crude palm oil (CPO)-to-biodiesel conversion factor at USD 85 per metric ton, while the biodiesel HIP calculation continues to follow the pricing formula stipulated under Ministerial Decree No. 3.K/EK.05/DJE/2024. Transportation cost components remain subject to Ministerial Decree No. 290.K/EK.05/MEM.E/2025.
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Based on the calculation attached to the official letter, the July 2026 biodiesel price was derived using the average KPB CPO price of IDR 15,217 per kilogram recorded during the period from May 25 to June 24, 2026. The CPO reference price was combined with the fixed conversion value of USD 85 per metric ton, before regional transportation costs are added according to the distribution area.
The calculation also incorporated the average Bank Indonesia middle exchange rate of IDR 17,895 per US dollar over the same period, resulting in a Biodiesel Market Index Price of IDR 14,562 per liter, excluding freight charges.
The monthly biodiesel HIP plays a crucial role in providing price certainty for biodiesel producers while ensuring the effective implementation of Indonesia’s mandatory biodiesel policy. The pricing mechanism also supports greater domestic utilization of palm oil as a renewable energy feedstock, helping stabilize the country’s palm oil industry while reducing dependence on fossil fuels.
Also Read: Indonesia Cuts July 2026 CPO Reference Price to USD 1,000.90 per Ton Amid Weak Global Demand
Through the same letter, the Directorate General of EBTKE reaffirmed its commitment to advancing Indonesia’s energy transition by promoting sound governance, transparency, and high-quality public services in the implementation of renewable energy programs. (P2)
