Singapore. All gas stations in Indonesia must sell the B50 biodiesel, which has a higher palm oil content, by October, according to a government spokesperson.

Indonesia recently became the first country to roll out the B50: a blend of 50% palm-based diesel and 50% conventional diesel. The country — also now reigning supreme as the world’s largest palm oil supplier — is banking on the move to curb fuel imports after the US-Iran war inflated global crude prices.

“We are having a three-month transition period for this B50 program,” Muhammad Qodari, the chief of the government’s communications agency, said in a recorded video to the press on Monday.

“All gas stations in the country should sell the B50 biodiesel by Oct. 1, 2026.” 

Indonesia is upbeat that it can cut its import bill by up to Rp 170 trillion (almost $9.4 billion) worth of foreign exchange with the B50 in place this year. Qodari went on to say that the B50 comes with “huge multiplier effects”, claiming that it can create Rp 23.49 trillion or nearly $1.3 billion in added value out of crude palm oil (CPO). The government is also letting stations use up the remaining B40 stocks until the transition period ends. 

State-run energy giant Pertamina is planning to make adjustments accordingly in its distribution. The company’s boss Simon Aloysius Mantiri said that the B50 mandate could cut diesel imports by around 310,000 barrels a day. 

Fabby Tumiwa, the chief executive officer of the energy think-tank IESR, sees B50’s potential in improving the trade balance. The country had plunged into the red for the first time in six years in May 2026, following massive energy imports from Singapore and Malaysia. However, Fabby suggested some flexibility in its implementation.

“B50 will provide higher economic boons if global crude prices are high, such as if it exceeds $110 per barrel. The policy would require bigger financial support when crude prices are relatively low,” the analyst explained.

The Brent crude benchmark inched close to $85 per barrel on Tuesday, although it had repeatedly broken $100 since the US-Israeli surprise airstrikes on Tehran in late February. Jakarta is also largely subsidizing its biodiesel mandate using proceeds from palm oil export levies. But as B50 requires more palm oil, this could force the country to shift the export-bound supplies to meet domestic biodiesel demand, possibly shrinking the proceeds.

“If this happens, this will restrict the fiscal room. That's why we need to regularly evaluate the program’s efficiency, so it would not put pressure on the state budget,” Fabby warned.

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