September 12, 2026 | 04:41 pm
TEMPO.CO, Jakarta - Director of Insight at the Kadin Indonesia Institute, Fakhrul Fulvian, stated that global oil prices approaching US$100 per barrel make the B50 biofuel agenda increasingly strategic.
The Kadin Indonesia Institute views B50 not merely as an energy policy and import substitution measure, but as a catalyst for transforming domestic industry and strengthening Indonesia's balance of payments.
According to Fakhrul, government estimates indicate that implementing B50 could displace roughly 18 million kiloliters of imported diesel and yield foreign exchange savings of approximately Rp170 trillion. Consequently, Fakhrul noted that these savings would lessen Indonesia's vulnerability to oil price volatility and reduce dependence on external financing.
“So far, when the balance of payments comes under pressure, discussions heavily center on how to draw dollars into Indonesia. B50 operates in the opposite direction, curbing dollar outflows while converting domestic resources into national energy capacity,” he said in a written statement released on Friday, September 11, 2026.
He emphasized that the next challenge is ensuring that the domestic demand generated by B50 fosters a new industrial ecosystem, ranging from refining, storage, terminals, blending, logistics, engineering, testing, to domestic equipment manufacturing.
“We must not only replace imported diesel with domestic feedstock. The benchmark of industrial transformation lies in how much new engineering, technology, logistics, and industrial capabilities are ultimately built within Indonesia,” he added.
Therefore, Fakhrul stated that the Kadin Indonesia Institute is advocating for the formulation of a B50 Industrial Transformation Roadmap. The framework would not only establish blending targets, but also map out the development of feedstock, refining capacity, distribution infrastructure, machinery readiness, domestic equipment, and advanced biofuels such as sustainable aviation fuel.
Fakhrul stressed that B50 implementation must account for end-user sectors, including mining, plantations, trucking, shipping, and heavy-equipment industries. He urged the government to monitor fuel efficiency, maintenance expenses, operational downtime, and equipment reliability following the rollout.
“The foreign exchange savings are substantial, but we must ensure there are no hidden costs in the form of elevated maintenance, downtime, or reduced productivity. B50 must be evaluated based on its net economic benefit for Indonesia,” he said.
State Budget Pressures and Subsidized Fuel
Separately, Minister of Energy and Mineral Resources Bahlil Lahadalia responded to global oil prices exceeding US$108.68 per barrel. Bahlil acknowledged that the uptick in crude prices continues to strain state finances.
“This is certainly not a light matter. It is heavy, as subsidy expenditures will undoubtedly rise,” Bahlil told reporters at his office in Jakarta on Friday, September 11, 2026.
He noted that with global oil prices surpassing US$100 per barrel, the average Indonesian Crude Price (ICP) pegged in the 2026 State Budget from January to September sits between US$80 and US$90 per barrel. The benchmark ICP set in the 2026 State Budget is US$70 per barrel.
Calculations by the Coordinating Ministry for Economic Affairs indicate that every one-dollar increase in the ICP adds Rp10.3 trillion in oil spending.
Conversely, a US$1 per barrel increase boosts state revenues by approximately Rp3.6 trillion, derived from non-tax state revenues (PNBP) in the oil and gas sector.
Nevertheless, Bahlil reaffirmed that the government will not raise subsidized fuel prices. He explained that under President Prabowo Subianto's direction, keeping subsidized fuel prices stable aims to protect public purchasing power.
“President Prabowo believes that safeguarding the purchasing power of lower- and middle-income groups is far more important, even amid the measures we must undertake. Expanding the subsidy budget, I think, is part of the steps we take,” Bahlil said.
Nandito Putra contributed to this article
Read: IHSG Down 1.43 Percent on Rising Oil, Fed Fears
Click here to get the latest news updates from Tempo on Google News
Indonesia, Thailand Can Lead Global Food Security, Kadin Says
38 hari lalu
Kadin says Indonesia and Thailand can become global food security leaders by combining agricultural strengths, biodiversity, and strategic cooperation
Kadin Steps Up Push to Expand Indonesian Agricultural, MSME Exports to Japan
41 hari lalu
Indonesian Chamber of Commerce and Industry (Kadin) is stepping up efforts to boost exports of agricultural commodities & MSMEs' products to Japan.
Why Prabowo Gathered 150 Kadin Leaders at the Palace
43 hari lalu
President Prabowo gathered business leaders from Kadin and representatives from 30 trade and business associations.
How the 2026 World Cup Generated Rp5.03tn in Indonesia's Economy
58 hari lalu
Kadin estimated that the 2026 World Cup generated Rp5.03 trillion in economic activity, driven by broadcasting, advertising, events, and MSME sales.
Blackout Losses
1 Juli 2026
A three-hour power outage or blackout has drawn the attention of the Surabaya Chamber of Commerce and Industry (Kadin).
Indonesia, France Seal US$3.5bn Deals During Prabowo Visit
30 Mei 2026
The signed partnerships between Indonesia and France center on energy resilience, trade, and defense.
Indonesia's OECD Accession Technical Review to Resume in July
23 April 2026
Coordinating Minister Airlangga confirms Indonesia's OECD technical review continues in July, focusing on sector-by-sector progress and global trade.
Indonesia Secures Rp1,400 Trillion Investment in 3 Months: Minister
22 April 2026
Indonesian Economy Minister Airlangga Hartarto attributes the success in achieving investment commitments to Kadin's role.
Weakening Rupiah Squeezes Businesses as It Hits 17,070
9 April 2026
The government is urged to implement all necessary fiscal and monetary interventions to restore the stability of the rupiah exchange rate.
Kadin: Gulf Economy in Disarray Amidst Iran War
4 April 2026
Kadin states that the impact of the Iran-US conflict has damaged economic activities in the Middle East region.
