Tender prices Biodiesel Profitable Pertamina

JAKARTA, IFN - Biodiesel producers urged the government to review the tender price of biodiesel. Therefore, biodiesel purchased Pertamina addressed to the subsidized and non-subsidized sector. Properly, there are differences in treatment in the purchase price of biodiesel.

Already twice tender but difficult for Pertamina meet the procurement of biodiesel or Fatty Acid Methyl Ester (FAME). In fact, the amount of biodiesel required Pertamina high enough reach 5.3 million kL for two years. This need is nearing capacity of biodiesel in Indonesia reached 5.6 million kL.
"Indeed, the obstacles encountered is the formula so that complicates procurement tender price of biodiesel Pertamina," said Ali Mundakir, Vice President of Communications at Pertamina.

In the first stage, based on data obtained PALM INDONESIA, the results of the procurement of biodiesel amounted to 1,237,069 kL won by five companies. They include Darmex Biofuels, Musim Mas, PT Pelita Supreme Agri Industries (Permata Hijau Group), PT Eterindo Wahanatama Tbk, and PT Indo Biofuels Energy.
Next in the second volume tender, Pertamina signed a contract with two companies namely PT Wilmar Group and Energy Primanusa Palma. FAME needs that can be absorbed 1.1618 million kL. The total absorption of the first and second tender has reached 2,398,869 kL.

Ali Mundakir said Pertamina uses the Mid Oil Platts benchmark price (MOPS) diesel fuel as directed by the government. Currently, the tender price formula used is MOPS minus differential during the contract period biodiesel producers.

With consideration, said Ali Mundakir, FAME always above MOPS MOPS diesel as happened in the last year. "Hence, we may not buy biodiesel as a substitute of diesel fuel that is much more expensive," said UB's graduates.

For biofuel producer associations, electoral formula MOPS diesel price is contrary to the rules of the government. As stated EMR Decree 3053/2011 on market index prices of biofuels (biofuels) are mixed in a material particular type of oil, previously Decree 0219/2010 EMR.
Pricing a market index performed every month by the Director-General of New Renewable Energy and Energy Conservation of the Ministry of Energy and Mineral Resources. Formulation Price Index

Market (HIP) based on benchmark prices Export (HPE) palm oil biodiesel from the Ministry of Commerce. Prior to the mandatory, HPE is used as a reference price for the blending of biodiesel to fuel subsidies and PLN were borne through the subsidy mechanism.

Paul Tjakrawan, Chief Executive of the Indonesian Biofuel Producers Association (APROBI) confirms this FAME tender price formula does not refer to the price of a market index such as the previously used in determining the selling price of biodiesel.

According to him, the use of price indexes are based HPE is used for the purchase of biodiesel and diesel subsidies. But the model of the tender price by Pertamina means the price index is not a reference anymore. "Then inikan have violated regulations," said Paul Tjakrawan to PALM INDONESIA.
By using the tendering scheme, biodiesel producers assume Pertamina wants to buy FAME based on the lowest price. Because bidding mechanism requires prospective suppliers to submit a bid price. Furthermore, this price will not change until the contract expires.

Mulyana Rida, Director General of Renewable Energy and Energy Conservation of the Ministry of Energy and Mineral Resources, said there are no rules that have been violated by the solar MOPS price mechanism. The reason, procurement of biodiesel by Pertamina or other business entity is a business to business. Meanwhile, the government set the market price index which is the basis of biofuel subsidies to Pertamina. Market index price scheme is addressed to the PSO course.
Added Rida, using the maximum price MOPS then no biofuel subsidies from the government.

According to Paul Tjakrawan, if his intention to reduce imports of diesel and help the country through the policy of subsidized biodiesel producers actually do not mind the tender price scheme. But what happens Pertamina absorb biodiesel producers for resale to non-subsidized sector or non PSO.
"If Pertamina supply to non-subsidized, should wear a reasonable price. Do not want to profit themselves, "complained Paul.

When the editor PALM INDONESIA requested confirmation of the Review on the tender price of biodiesel. Karen Agustiawan, President Director of Pertamina, and Ali Mundakir, VP Corporate Communications of Pertamina did not answer the SMS and phone until the news was revealed.

Domino effect ensued as a result of the scheme used MOPS Pertamina. Company commercial license holders of other fuels such as Shell, following the pattern of Pertamina that manufacturers increasingly difficult position. "If it happens as a result of our margins increasingly closed," said Paul.

Paul Tjakrawan said MOPS used Pertamina is under the economics of biodiesel selling price. As a result, companies are less eager to participate in the tender biodiesel Pertamina because of the price factor.

What worries when the CPO price is rising as it is today affected the production cost of biodiesel production. Immanuel Sutarto, President Director of PT Eterindo Wahanatama Tbk, said biodiesel in Indonesia today all use raw materials of derivative products that RBD Palm Oil. When the CPO price rise will clearly affect the cost of biodiesel production also increased. Not to mention, the biodiesel industry require other supporting materials in the manufacture of biodiesel such as methanol.

Togar Sitanggang, Senior Manager Musim Mas Group, recognizes biodiesel producers affected by the rising price of CPO is the case today. The assumption, the price of RBD Palm Oil, derivative products, now at US $ 930 per metric ton, coupled with a duty of around US $ 15 per metric ton. Up to the biodiesel plant, the price of RBD Palm Oil has been around US $ 915 per metric ton. The raw material is reprocessed to become FAME will be a cost of US $ 150 per metric ton. Thus, the total cost of production of biodiesel reaches US $ 1,065 per metric ton. "But the price of diesel fuel from Pertamina MOPS at US $ 888 per metric ton," complained Togar.

Amid rising global palm oil prices hurt most are producers of biodiesel without oil palm plantations. Because, says Paul, they have obtained the tender price according to the contract tender. But the purchase of raw materials according to the price prevailing in the market. Not only that, investment in biodiesel is also pending in this year.
There are several companies planning to add production capacity but postpone temporarily. The total investment is expected to be delayed until the year 700 thousand kL. And with the additional investment is expected to total biodiesel production capacity reaches 6.3 million kL. this year.

Dadan Kusdiana, Director of Bioenergy Ministry of Energy, suggesting biodiesel producers build their own oil palm plantations, especially for those who are not supported by the raw material needs of the internal CPO.

"Going forward, the direction of biodiesel producers must have its own supply of palm oil. Most now live two or three companies that do not have. Yes, for prospective investors who do not have a garden mending need not enter, because they should already be ready, "said Dadan Kusdiana.
Fixed MOPS

The attitude of mind producers against solar MOPS mechanism does not change the policy of Pertamina. Ali Mundakir claimed third tender procurement biodiesel prepared from March to April 2014. The fixed price mechanism using MOPS diesel. "We have been mandated by the government to use MOPS," said Ali
Slightly different from the previous tender, Pertamina is willing to bear the shipping costs of biodiesel through the mechanism of the Free on Board (FOB). The goal, said Ali Mundakir, complete the transportation cost barriers associated manufacturers to supply the Indonesian territory of East and low demand.
As an example implementation FOB, said Ali Mundakir, biodiesel will be taken to a collection point located in Napier. Once away, the manufacturer will bring it back to the location of fuel terminals.

"But, Pertamina requires that the cost of transportation should not be higher than the cost of transport Solar Pertamina," Ali said in a release Mundakir.
Re-tendering is targeted to absorb 850 thousand kL. After two stages of the tender carried out, Pertamina get kepastikan FAME supply of 2.4 million kL. This is done in order to meet the needs of 5.3 million kL within 2 years.

Dadan Kusdiana said third auction is to address the needs of biodiesel in 2014. "The rest of the time the supply 9 to 10 months of this year," said Dadan.
In the third tender, the supply of biodiesel to be auctioned include 115 thousand kiloliters per year in Sumatra, 28 thousand kiloliters per year Nusa Tenggara, 335 thousand kiloliters per year partial region of Kalimantan and Sulawesi, and 372 thousand kiloliters per year for parts of Kalimantan, Sulawesi, and Papua.

In addition, Pertamina prepare distribution facilities biofuel or biodiesel in 44 oil refueling stations throughout Indonesia. Of the 44 facilities that will complement the other terminal 33 has distributed biodiesel.

"Status of the preparation of the terminal has been largely completed. In eastern Indonesia scheduled for completion late June 2014," he said in a press release.
All 44 of the terminal 19 units located in Sumatra, seven in Java, one in Bali, one in Kupang, eight in Kalimantan, Sulawesi six, and two in Papua.
Meanwhile, 33 existing biodiesel terminal located in nine units Sumatra, Java 18 units, two in Bali, and four in Kalimantan.
Integrated Regulation

Sluggishness of the first and second tender procurement make the government plans to further assess the purchase price formula biodiesel. Dadan Kusdiana states learn from the auction at the last stage when the price is less attractive to manufacturers. But the results of the study a new formula in the implementation of the new tender price bid in 2015.
Paul Tjakrawan support the government's plan reviewing the tender price of biodiesel. The proposal of the association in order to use a formula that consists of raw material prices plus costs plus a margin and transport processes. Another alternative is the price index may be referring to any reference including diesel MOPS. "But the government should set rules that are integrated from upstream to downstream. "In addition, the Ministry of Energy and Mineral Resources consistently fighting for biofuel price index has dipakati by price BBN team," said Paul.

So that the regulation was going well, another requirement is needed special minister in charge of coordinating all policies biodiesel. With consideration, says Paul, the government must realize that all these policies involve many agencies ranging from the Ministry of Agriculture, Ministry of Industry, Ministry of Energy, and the Ministry of Environment.

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