Grow Biodiesel And Build An Oil Factory, Faisal Basri: Stir If You Work Together

Indef's senior economist, Faisal Basri. (Photo by: Ministry of Communication and Information)

JAKARTA - A senior economist at the Institute for Development of Economics and Finance (INDEF) stated that the current government is too ambitious, especially in the energy and mineral resources (ESDM) sector.

Faisal's statement referred to the government which is developing biodiesel, and is still planning to complete four Refinery Development Master Pland (RDMP) projects and two new refineries.

"The government should review the plan. In addition, the government is also ambitious to develop electric vehicles, there will be chaos if everything is realized at the same time. The government will also bear the high economic costs of all these programs," said Faisal Basri in a virtual discussion, at the end. last week, Saturday 29 August.

Meanwhile, related to biodiesel development to reduce the current account deficit (CAD), according to Faisal, it did not go as expected. Biodiesel development is expected to be able to reduce oil imports, but based on the calculation of opportunity cost, the trade deficit is still occurring.

"This actually resulted in a trade deficit in 2018 of Rp. 85.2 trillion, not a small number. And in 2019 it was Rp. 72.1 trillion," said Faisal.

Faisal added that the biodiesel policy was actually detrimental to oil palm farmers. Meanwhile, the most beneficiaries from this program are biodiesel entrepreneurs.

According to Faisal, during the COVID-19 pandemic what the government should focus on is the threat of an energy deficit in 2021. Energy consumption continues to increase along with population growth, however, said Faisal, it is not supported by energy reserves.

RI's oil and gas reserves are only 2.5 billion barrels, oil consumption reaches 1.7 million barrels per day. However, production is only 781 thousand barrels per day.