JAKARTA - The government is currently boosting the energy and mineral resources (ESDM) sector by developing biodiesel, as well as completing four Refinery Development Master Pland (RDMP) projects and two new refineries. This government project, according to some observers, could go hand in hand.
UGM Energy Observer Fahmy Radhi said that these government projects must be carried out simultaneously. Because, this is to reduce dependence on imports of fuel oil (BBM).
"Both must be carried out simultaneously to reduce fuel imports. Development of biodiesel is to reduce imports of diesel and aviation fuel. Meanwhile, the construction of refineries to reduce gasoline imports, including Euro-4," he told VOI, in Jakarta, Tuesday, September 1.
Agreeing, the Executive Director of Energy Watch, Mamit Setiawan said, in the current situation the government is difficult to choose one of the two projects. One of the reasons is because Indonesia's need for fuel is quite high.
"Regarding the current condition, I think it is really wrong to choose one. Indonesia currently has quite a high demand for fuel. With a production of 700 thousand BOPD and a consumption of 1.4 million BOPD I think the construction of refineries, both RDMP and Grass. Root Refinery (GRR) must also run, "he said.
Meanwhile, said Mamit, for the construction of a new refinery, it must be integrated with petrochemicals so that the refinery's capacity will be maximized. Meanwhile, for RDMP, which one must be prioritized first.
"For the RDMP, I think which ones are prioritized. Currently Balikpapan is already running, so we must catch up to operate immediately to meet fuel needs, especially Eastern Indonesia," he said.
Related to the biodiesel program, said Mamit, this must also continue. This is due to the fact that the impact of the program is clearly visible, in which Pertamina has stopped importing diesel fuel because its needs have been met.
"In the future, we will increase the use of EBT (new and renewable energy) so that the energy mix target can be achieved. Through the biodiesel program, we can also reduce our country's CAD," he said.
Then what about the high economic costs of all these programs? Fahmy said that the financing of all government projects was left to PT Pertamina (Persero). He suggested that this state-owned company seek partners as investors for the program.
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"For financing, just leave it to Pertamina to look for partner investors. Thus it does not interfere with APBN spending, which is again focused on financing the health and economic sectors, which have been hit hard by the COVID-19 pandemic," he said.
Mamit said, to run all these projects simultaneously depends on how Pertamina can make financial arrangements, especially regarding the development of RDMP and GRR.
"That's why I think Pertamina has to find a partner, especially for the RDMP and GRR programs," said Mamit.
Previously, 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.
Faisal assessed that the biodiesel policy was actually detrimental to oil palm farmers. Meanwhile, the most beneficiaries from this program are biodiesel entrepreneurs.
Furthermore, Faisal said, 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.
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