It wants to boost its foreign exchange earnings.
Indonesian president Joko Widodo sought the immediate implementation of the mandatory use of biodiesel in order to boost foreign exchange earnings, Indonesian news agency Antara News reported.
"I will update the information on this since according to data, it (mandatory biodiesel) could save Indonesia some US$21m per day in imports," Joko Widodo said during a closed-door meeting at the Bogor Presidential Palace
According to Bloomberg, Jokowi’s government is grappling with an emerging-market selloff and a deteriorating current-account deficit that’s set to swell to the highest in four years. This prompted the central bank to hike its benchmark interest rate by 100 bps since mid-May and to drain about US$12b from its reserves.
Indonesia had also previously asked the transportation industry to use fuel blended with 20% palm-based biofuel, or B20, with plans to expand the mandate to railways, military and mining vehicles this year. The government plans to launch the expanded B20 program in early August.
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