Palm Oil Can Provide Solution to Energy Gap

Bandung, West Java (Antara) - Palm oil can help to bridge the gap between supply and demand for energy in Indonesia, the president of an oil company has said. "In the next few years, the gap will grow wider as production drops and demand increases by four to five percent every year," president of the board of commissioners of PT Medco Duta Corporation Arifin Panigoro said at the ninth Indonesia Palm Oil Conference here on Friday. He said demand for energy in Indonesia would reach one million barrels a day by 2020, so diversification of energy sources is crucial. Arifin emphasized the importance of environmental awareness in the production of energy, since various environmental and community groups are increasingly demanding energy products that have the least negative impact on the environment. According to a report from research consultancy Mackenzie, the fuel deficit (the gap between supply and demand) in Indonesia between 2012 and 2018 is likely to increase from 340 thousand to 420 thousand barrels a day. According to the consultancy, growth in the demand for energy in Indonesia is being driven by income growth, increased car ownership and fuel subsidies. Arifin said the possibilities for increasing the country's energy security include increasing biodiesel production capacity until 2016 and replacing 50 percent of diesel imports with biodiesel between 2016 and 2020. He said to replace 50 percent of diesel consumption (total diesel consumption is currently estimated at 45.9 million kilo liters), 10.3 million tons of palm oil would be required. However, making the transition from diesel to biodiesel would save Indonesia US$10.8 million in foreign exchange. The final step would be to completely eliminate diesel and use only biodiesel between 2020 and 2025, he added. (*)