InfoSAWIT, JAKARTA — Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has set the October 2026 Market Index Price (HIP) for biodiesel at Rp15,072 per liter, excluding transportation costs. The new rate took effect on October 1 as part of the country’s mandatory biodiesel blending program.
According to an official statement from the Directorate General of New, Renewable Energy and Energy Conservation (EBTKE), as reported by InfoSAWIT on Tuesday, October 6, 2026, the decision was formalized in Letter No. B-3157/EK.05/DJE.B/2026, dated September 28, 2026. The letter was signed by EBTKE Director General Eniya Listiani Dewi.
The government also set the conversion component for crude palm oil (CPO) into biodiesel at US$85 per tonne. Transportation costs are added separately in accordance with applicable regulations.
The October biodiesel HIP calculation is based on the average CPO price recorded by KPB over the period from August 25 to September 24, 2026. The average stood at Rp15,820 per kilogram.
Under the prescribed formula, the average KPB CPO price is combined with the US$85-per-tonne conversion component, converted using a factor of 870 kilograms per cubic meter, and adjusted for transportation costs.
The exchange-rate reference used in the calculation was Bank Indonesia’s average middle rate over the same period, at Rp17,702 per US dollar.
The pricing mechanism follows Minister of Energy and Mineral Resources Decree No. 3.K/EK.05/DJE/2024, which governs the market index price for biodiesel blended into conventional diesel fuel. Transportation cost provisions refer to Appendix I of Ministerial Decree No. 290.K/EK.05/MEM.E/2025.
CPO Prices Remain a Key Determinant
The biodiesel HIP is closely linked to CPO prices because palm oil is the primary feedstock for palm-based biodiesel. Changes in the price of crude palm oil therefore influence the government’s calculation of the biodiesel index price.
The mechanism connects Indonesia’s palm oil plantation industry with its energy sector, providing a pricing reference for the implementation of the national biodiesel mandate.
With the October rate now in force, industry participants and other stakeholders must use the stipulated price in accordance with the applicable provisions, while accounting for transportation costs separately.
The latest determination underscores the importance of CPO prices in shaping the cost structure of palm-based biofuel as Indonesia continues to implement its mandatory biodiesel program. (T2)
