FOREIGN OIL FIRM TO BE ALLOWED TO BUY, SELL BIOFUEL

A regulatory package will soon be put in place to allow foreign oil firm such as Petronas of Malaysia and Shell of the Netherlands to distribute biofuel so as to boost competition on the domestic market.

The foreign firm would be allowed to buy biofuel from growers/producers sand sell it back to public as long as it was being sold for transportation purposes. So, the consumer will get benefit from fair prices due to the competition, while on the other hand investor and growers will continue to be interested in biofuel production. The government also appointed state oil and gas firm PT PERTAMINA and state power firm PT PLN to serve as standby buyers of biofuel.

The government targeted the country would be able to achieve its biofuel production on 13 million tons per year by 2009. According to the Investment Coordinating Board (BKPM), 15 companies have applied for licenses to produce a total of 1 million ton of bio-diesel per year. The companies including;

• PT Wahana Abdi Tirta,
• PT Anugrah Inti Gemanusa,
• PT Sari Dumai Sejati,
• PT Indo Bio Fuels,
• PT Artha Trans Jaya
• PT Asanagro Agung Jaya
• PT Wilmar Bio Energi Indonesia (JV between PT Bakrie Sumatera Plantation and PT Rekayasa Industri)
• PT Musimas
• PT Karya Prajona Nelayan
• PT Biodiesel Indonesia (JV between PT Rekayasa and PT Pertamina)
• PT Astra Agro Lestari
• PT Eterindo Jawa Timur
• PT Energi Alternatif Indonesia
  

The government, itself will build 8 bio-diesels factories in the country in a move to provide an alternative to expensive fossil-based fuels. Each factory would be built with production capacity of 3,000 to 6,000 tons per year. The factories locations are selected cause of close with their raw material, palm oil plantations.

The estimated cost of these projects is about US$65 million, will be financed from the 2006 national budget. The operation of the factory will be offered to local administration. The hand over of operation to local administration will be give a year after the factory start operation.