Jurnal Ekonomi Pembangunan Volume 20 (2): 115-124, December 2022 P-ISSN: 1829-5843; E-ISSN: 2685-0788 Available at: https://ejournal.unsri.ac.id/index.php/jep/index DOI: 10.29259/jep.v20i2.18475 115 Research article The Link between Crude Palm Oil and Crude Oil Price in Various Periods of the Biodiesel Mandatory Policy in Indonesia 1 Faculty of Economics and Business, Universitas Indonesia, Indonesia * Correspondence author email: nency.febrina@ui.ac.id Article Info: Received: 25 July 2022; Accepted: 07 December 2022; Published: 31 December 2022 Abstract: The biodiesel policy brought changes in the analysis of crude palm oil (CPO) prices. Supply and demand are no longer the main factors, but the correlation between CPO and crude oil prices. The main objective of this study is to provide an empirical study of the relationship between CPO and Indonesian Crude oil Price (ICP) in various periods of mandatory biodiesel policy in Indonesia. Using the Ordinary Least Square (OLS) method of time series data from 2001-2021, this study shows that in general CPO and ICP are positively and significantly correlated, but the price link is very dependent on the biodiesel policy that is implemented. ICP and CPO are positively and significantly correlated in the biodiesel mandatory period with limited subsidies (2006-2015) and in the biodiesel mandatory period with incentives which combined with progressive CPO export levies tariff (2020-2021). ICP and CPO are not correlated during the mandatory biodiesel period, combined with incentives and a fixed CPO export levy tariff (2016-2019). When CPO and ICP prices are strongly and significantly correlated, stock increases are not associated with a decrease in CPO prices. However, when the CPO and ICP prices are not significantly correlated, the stock increase is followed by a decrease in the CPO price. CPO price stabilization only occurs during the biodiesel mandatory period, combined with incentives and a fixed CPO export levy tariff. Keywords: Biodiesel, palm oil, CPO, crude oil, mandatory policy JEL Classification: C32, H25, O13, Q28, Q48. Abstrak: Kebijakan biodiesel membawa perubahan dalam analisis harga minyak sawit mentah (CPO). Penawaran dan permintaan bukan lagi menjadi faktor utama, melainkan korelasi CPO dan minyak mentah. Penelitian ini bertujuan untuk melihat keterkaitan harga CPO dan minyak mentah Indonesia (ICP) pada berbagai periode kebijakan mandatori biodiesel di Indonesia. Dengan menggunakan metode analisis Ordinary Least Square (OLS) data deret waktu dari 2001 sampai dengan 2021, penelitian ini menunjukkan secara umum CPO dan ICP berkorelasi positif dan signifikan, tetapi secara khusus hubungannya sangat bergantung pada kebijakan biodiesel yang dijalankan. ICP dan CPO berkorelasi positif dan signifikan pada periode mandatori biodiesel subsidi terbatas (2006-2015) dan mandatori biodiesel insentif selisih harga yang dikombinasikan dengan tarif pungutan ekspor progresif (2020-2021). ICP dan CPO tidak berkorelasi pada saat mandatori insentif selisih harga dikombinasikan dengan tarif pungutan ekspor tetap (2016- 2019). Pada saat harga CPO dan ICP berkorelasi kuat dan signifikan, kenaikan stok CPO tidak diasosiasikan dengan penurunan harga CPO. Namun, saat harga CPO dan ICP tidak berkorelasi, kenaikan stok CPO diikuti penurunan harga CPO. Stabilisasi harga CPO hanya terjadi pada periode mandatori biodiesel insentif selisih harga yang dikombinasikan dengan tarif pungutan ekspor tetap. Kata Kunci: Biodiesel, minyak sawit, CPO, minyak mentah, kebijakan mandatori How to Cite: Limbong. N., & Halimatussadiah. A. (2022). The Link between Crude Palm Oil and Crude Oil Price in Various Periods of the Biodiesel Mandatory Policy in Indonesia. Jurnal Ekonomi Pembangunan, 20(2), 115-124. DOI: 10.29259/jep.v20i2.18475 Nency F. Limbong 1 *, Alin Halimatussadiah 1