Indonesian Government Adjusts Biofuel Pricing for January 2026

New Pricing Structure for Biodiesel and Bioethanol

The Indonesian Ministry of Energy and Mineral Resources (ESDM) has announced an increase in the Biodiesel Price Index to Rp 13,631 per liter for January 2026, representing a Rp 250 per liter increase from the previous month's price of Rp 13,381 per liter. This adjustment is based on the formula stipulated in Ministerial Decree No. 3.K/EK.05/DJE/2024, which calculates the price index using the average CPO price during the period of 25 November 2025 to 24 December 2025.

Calculation Methodology

The biodiesel price index is determined through a formula that considers several factors:

1. Average CPO Price: Rp 14,250/kg during the reference period
2. Conversion Value: 85 US$/ton for processing CPO into biodiesel
3. Density Conversion: 870 kg/m³ to convert kilogram to liter
4. Transportation Costs: Additional component in the final pricing
5. Exchange Rate: Average BI middle rate of Rp 16,684/US$

The formula used is: HIP = (Average CPO Price + 85 US$/ton) x 870 kg/m³ + Transportation Costs.

Bioethanol Pricing Adjustment

Similarly, the Bioethanol Price Index for January 2026 has been set at Rp 8,438 per liter, showing a marginal increase from Rp 8,428 per liter in December 2025. The calculation for bioethanol uses a different formula: HIP = (Average Molasses Price over 3 months x 4.125 kg/L) + 0.25 US$/L.

Key Factors in Bioethanol Pricing

1. Average Molasses Price: Rp 1,034/kg for the period August to December 2025
2. Conversion Factor: 4.125 kg/L for molasses to bioethanol conversion
3. Processing Value: 0.25 US$/L for conversion cost
4. Exchange Rate: Average BI rate of Rp 16,685/US$

Implications of the Price Adjustments

The increase in biodiesel prices reflects global commodity trends and currency fluctuations, while the marginal change in bioethanol prices indicates relative stability in molasses prices. These adjustments are critical for maintaining the economic viability of Indonesia's biofuel program while managing production costs.