# Declining Appeal of Diesel Demand in Indonesia

- Link: https://www.thailand-business-news.com/asean/indonesia/159492-declining-appeal-of-diesel-demand-in-indonesia
- Published: 2024-09-02T20:16:00+07:00
- Author: News Desk

Indonesia’s diesel demand has experienced a notable decline in recent years, as 
the country transitions towards more sustainable energy sources.

**Key View**

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 * We have revised down our forecast for Indonesia’s oil demand growth, considering
   the potential loss in diesel demand due to fuel substitution in the power and
   industrial sectors.
 * Evolving energy transition policies are expected to create challenges for diesel
   and fuel oil demand across various economic sectors.
 * Gasoline demand is projected to remain resilient supported by rising car ownership
   and lack of substitutes from biofuel industry.
 * We anticipate the government’s plan to cut fuel subsidies in 2025 will have implications
   for fuel demand growth prospects, especially in the transport and industrial 
   sectors.

 Once heavily reliant on diesel for transportation and industrial purposes, Indonesia
is now shifting its focus to cleaner alternatives, partly driven by government initiatives
aimed at reducing carbon emissions. This change reflects a growing global awareness
of environmental issues and the urgent need to combat climate change.

The rise in electric vehicles (EVs) and the promotion of biodiesel have played significant
roles in diminishing diesel’s popularity. Indonesia’s ambitious plans to increase
the biodiesel blend in fuel products aim to reduce dependency on fossil fuels, stimulating
domestic agricultural sectors in the process. This strategic pivot not only helps
the environment but also bolsters energy security, as the country seeks to harness
its local resources for fuel production.

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Moreover, the pandemic has accelerated changes in consumer behavior, with logistics
and transportation sectors exploring alternative energy solutions. As businesses
adapt, diesel’s once-solid foothold in Indonesia’s energy landscape seems increasingly
precarious. In this evolving market, the shift to cleaner energy aligns with global
trends and emphasizes Indonesia’s commitment to sustainable development, hinting
at a future with diminished reliance on diesel fuel.
[Read More](https://www.fitchsolutions.com/bmi/oil-gas/indonesias-diesel-demand-losing-its-shine-29-08-2024)