SINGAPORE, Dec 22 (Reuters) - Indonesia is back on track to allocate 9.2 million kilolitres of unblended biodiesel to companies next year as originally planned, the energy ministry said on Tuesday.
The announcement comes a week after an official from the National Energy Council said the country may have to lower its biodiesel - palm oil biofuel - allocation next year to 8.5 million kilolitres due to an uncertain fuel consumption outlook due to the COVID-19 pandemic.
The Indonesian government requires its diesel to be blended with 30% biocontent made out of palm oil, aiming to be less dependent on fuel imports and sop up palm supply. It sets output targets, subsidises the price difference between palm and crude oil and allocates the product to 20 biofuel companies.
However a slump in fuel prices this year has made the programme less economical, and plans to increase the biocontent to 40% have been delayed due to funding issues.
Indonesia is expected to distribute only 8.5 million kilolitres of biodiesel this year, compared with the 9.6 million originally planned, according to the government.
(Reporting by Fathin Ungku and Bernadette Christina Munthe; Editing by Pravin Char)
((fathin.ungku@thomsonreuters.com; +65 8578 6640;))
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