Indonesia raised its biodiesel allocation in 2022 to 11.03 million kiloliters amid expectations of increased demand in the fourth quarter, while extending a palm oil export tax exemption, a senior official said on Monday (29).

The allocation of biodiesel, which is made of palm oil in Indonesia, will be increased by 10.15 million kiloliters, Economic Affairs Coordinating Minister Airlangga Hartarto said in a statement.

Indonesia has a mandatory B30 program, where 30% of the fuel is palm oil-based, and the post-pandemic economic recovery is increasing demand for fuel, he said.

The world's largest palm oil producer has also decided to extend its export tax exemption until October 31, Airlangga added.

"The extension of the $0 rate aims to maintain the current situation, in which the price of crude palm oil is beginning to stabilize, the price of cooking oil begins to fall and the price of bunches of fresh fruit begins to rise," he said.

The world's largest palm oil exporter has exempted the export rate of the product since mid-July to encourage the export of edible oil amid a buildup of domestic stock caused by an export ban in May imposed to control cooking oil prices.

The Ministry of Finance regulation detailing the extent of the tax exemption has not yet been made public.

Source: CNN Brasil