The influence of crude oil price in biodiesel and its implication on the production of palm oil: The case of Indonesia

Abstract

Over the last five years (2012-2016) there has been a rise in world oil prices which were very noticeable on an average of 17,85 percent per year. This increase encouraged the increased use of alternative fuels, one of which was biodiesel. It was estimated that the average increase in global biodiesel production amounted to 43.18 percent per year. Because one of biodiesel feedstocks was CPO, the increased production of biodiesel causes CPO export demand to increase simultanesly. The Bio-diesel utilization is also expected to reduce oil consumption. The purpose of this paper is to examine the influence of crude oil price increase on the Biodiesel utilization, oil consumption reduction, and pollutant emission reduction.