Indonesia plans to increase blending of palm oil with diesel this year to cut costs of importing fossil fuel and shore up prices of the world’s most-used vegetable oil.
The world’s largest palm oil producer will raise the blending rate to 15 percent this year from 10 percent and subsequently to 20 percent, Coordinating Minister for Economic Affairs Sofyan Djalil said in Jakarta on Friday.
The Energy and Mineral Resources Ministry may notify higher blending rule next week and it will be effective immediately, Djalil said. Increased use of palm oil in biodiesel may reduce supply of the vegetable oil and support prices, he said.
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