Singapore: Indonesia will require all fuel stations across the country to sell B50 biodiesel from October 1, completing a three-month transition to a fuel blend containing 50% palm-based biodiesel and 50% conventional diesel.
The Southeast Asian nation recently became the first in the world to introduce B50 biodiesel as part of its strategy to reduce dependence on imported fuel. The move comes after higher global crude oil prices, driven by the US-Iran conflict, increased the country’s energy import bill, Jakarta Globe reported.
“We are having a three-month transition period for this B50 programme,” Muhammad Qodari, head of the government’s communications agency, said in a recorded statement on Monday.
“All gas stations in the country should sell B50 biodiesel by Oct. 1, 2026,” he said.
Indonesia, the world’s largest producer of palm oil, expects the B50 programme to reduce fuel imports and save up to 170 trillion rupiah (about $9.4 billion) in foreign exchange this year. The government also estimates that increased domestic use of crude palm oil (CPO) will generate 23.49 trillion rupiah (around $1.3 billion) in additional economic value.
During the transition period, fuel stations have been allowed to sell their remaining B40 biodiesel stocks before switching fully to B50.
State-owned energy company Pertamina is adjusting its fuel distribution network to support the rollout. Chief Executive Simon Aloysius Mantiri said the B50 mandate could reduce Indonesia’s diesel imports by about 310,000 barrels per day.
Energy analyst Fabby Tumiwa, Chief Executive Officer of the Institute for Essential Services Reform (IESR), said the higher biodiesel blend could improve Indonesia’s trade balance. The country recorded its first trade deficit in six years in May 2026, largely due to increased energy imports from Singapore and Malaysia.
However, Tumiwa said the economic benefits of the programme would depend on international crude oil prices.
“B50 will provide greater economic benefits when global crude oil prices are high, such as above $110 per barrel. The policy will require larger financial support when crude prices are relatively low,” he said.
Brent crude was trading near $85 per barrel on Tuesday after having risen above $100 per barrel several times following the US-Israeli airstrikes on Tehran in late February.
Indonesia finances its biodiesel programme through levies on palm oil exports. Analysts cautioned that the higher palm oil requirement under the B50 mandate could divert supplies from export markets to domestic fuel production, reducing export levy collections.
“If this happens, it will limit fiscal space. That is why the programme’s efficiency needs to be evaluated regularly so that it does not put pressure on the state budget,” Tumiwa said.
