InfoSAWIT, JAKARTA – Indonesia's Ministry of Energy and Mineral Resources (ESDM) has officially set the Market Index Price (HIP) for biodiesel at Rp14,924 per liter for August 2026, excluding transportation costs. The new benchmark took effect on August 1, 2026, and will serve as the pricing reference for the country's Mandatory Biodiesel Program.

According to a letter issued by the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE), the conversion factor from crude palm oil (CPO) to biodiesel remains unchanged at US$85 per metric ton (MT). The pricing formula follows the provisions outlined in Ministerial Decree No. 3.K/EK.05/DJE/2024, while transportation costs continue to be determined under Ministerial Decree No. 290.K/EK.05/MEM.E/2025.

The August HIP calculation was based on an average KPBN CPO price of Rp15,626 per kilogram during the period from June 25 to July 24, 2026. This value was combined with the fixed conversion factor of US$85/MT before regional transportation costs were added according to the government's distribution formula.

The calculation also used the average Bank Indonesia middle exchange rate of Rp17,985 per US dollar over the same period. Based on this methodology, the government finalized the biodiesel HIP at Rp14,924 per liter, excluding freight costs.

The HIP serves as a key pricing instrument to provide certainty for biodiesel producers while supporting the continued implementation of Indonesia's mandatory biodiesel program. The policy is also expected to strengthen domestic utilization of palm oil as a renewable energy feedstock, creating greater value for the country's palm oil industry while advancing Indonesia's energy transition agenda.

The Directorate General of EBTKE reaffirmed its commitment to promoting Indonesia's clean energy transition through transparent governance and improved public services in implementing renewable energy programs. (T2)

Source: InfoSAWIT