KAJANG, Selangor: Primary Industries Minister Teresa Kok said at current low palm oil pricing, it is cheaper for trucks and busses to use biodiesel or palm methyl ester (PME) than petroleum diesel.
Crude palm oil, which is currently trading at RM2,200 per tonne, is the main feedstock used in the production of PME or biodiesel.
“As of todate, diesel that is being sold at the fuel stations is priced at RM2.31 per litre while PME cost RM2.28 per litre,” she said.
The minister was speaking to reporters here today, after officiating a launching ceremony of a collaboration between Malaysian Palm Oil Board and Kajang Municipal Council to boost usage of PME to a B20 blend in their diesel-powered vehicles.
The B20 blend is made up of 20 per cent PME and 80 per cent petroleum diesel.
Yesterday, at Parliament, Kok in answering Kota Kinabalu Member of Parliament Chan Foong Hin's query, said at current Brent crude oil price of US$75.69 per barrel and crude palm oil futures of around RM2,200 per tonne, it works out to be cheaper to blend higher percentage of PME into regular diesel.
Kok estimated the government stands to save about RM10.7 million per year in subsidy if Malaysia raise the biodiesel mandate for the transport industry, from the current B7 to B10.
B7 is a fuel blend of 7 per cent PME and 93 per cent regular diesel while B10 connotes a higher 10 per cent of renewable fuel in the blend.
"If we look at the current price, the price of diesel for industries is between RM2.60 and RM2.80 per litre compared with PME cost at RM2.28 per litre. That means the use of B7 in the industrial sector would reap RM6.5 million a year in cost savings to the industries, if the current prices of petroleum and palm oil are maintained," she reportedly said.
On top of that, Kok also highlighted the government can also save about RM1.6 billion per year in diesel import costs.
Kok explained that the nation's biodiesel programme was introduced in 2011 with a blend rate of B5 (5 per cent PME mixed with 95 per cent petroleum diesel).
In view of the current favourable pricing opportunity of petroleum and palm oil, she encouraged companies in the logistics, plantation and manufacturing sectors to support the government efforts to raise domestic palm oil consumption through the use of B10 biodiesel blend.
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