The government's plan to divert the diesel oversupply triggered by the 50 percent biodiesel mandate (B50) into jet fuel is now drawing sharp scrutiny from public policy observers. The National Secretariat of the Indonesian Forum for Budget Transparency (Seknas FITRA) warned that this strategic move cannot be carried out instantly due to significant technical and financial hurdles.
Seknas FITRA Research and Data Manager, Badiul Hadi, highlighted that the government appears overly rushed in seizing opportunities from the projected diesel surplus of 3 to 4 million kiloliters. According to him, the government needs to conduct a more comprehensive study before ensuring that this volume can be directly converted into aviation fuel or jet fuel.
Technically, there are fundamental differences between diesel and jet fuel (Jet A-1), ranging from distillation fractions to operational safety standards. To produce jet fuel, refineries require significantly more complex technology configurations, such as hydrocracker units and catalytic reformers. Badiul emphasized that merely shifting diesel production volumes will not meet the technical specifications required for aviation fuel.
On the funding side, modification or revamping efforts on PT Pertamina's existing refineries are estimated to cost up to billions of US dollars. For comparison, refinery development projects such as the RDMP Balikpapan and Balongan absorb massive capital. The option of building new refineries is deemed far more expensive, with investment estimates reaching hundreds of trillions of rupiah, making the payback period aspect crucial to consider.
In addition to cost issues, Seknas FITRA also reminded the government not to get caught up in mere surplus euphoria. Badiul stressed the importance of data transparency regarding the main cause of the surplus. There are concerns that the surplus stems not from production efficiency, but rather from a slowdown in industrial activity or changes in transportation patterns that weaken domestic energy consumption.
