Analysis: Pursuing energy security with self-sufficiency, demand controls - Academia

The government is pursuing a two-pronged strategy to strengthen energy security: reducing dependence on fuel imports through the mandatory B50 biodiesel policy while reforming fuel subsidies to make them more targeted toward lower-income households. Both policies, however, come with challenges. The B50 program, which combines 50 percent palm oil-based biofuel with 50 percent fossil-fuel diesel, could increase domestic demand for crude palm oil (CPO), potentially affecting exports and cooking oil prices. Meanwhile, the government’s planned restrictions on subsidized fuel purchases have raised questions about the accuracy of household welfare…