UPDATE 1-Indonesia biofuel industry seeks higher subsidies

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JAKARTA May 27 (Reuters) - Indonesian biofuel producers want authorities to allocate higher subsidies next year, in line with a surge in crude oil prices, the chairman of the industry association said on Wednesday.

Indonesia's palm-based biodiesel firms, which have mostly stopped operations, have said they are awaiting for a new price formula and government subsidies in order to survive after being hit by rebounding palm oil prices

The Indonesian biofuel producers association is seeking a subsidy for this year of 1,450 rupiah ($0.141) per litre for bioethanol and 1,660 rupiah per litre for biodiesel if crude prices reach $70 per barrel.

"That's our estimate for how much we would need for subsidies next year," Purnardi, chairman of the industry association, told reporters.

The proposal would bring total subsidies for biofuel next year to 1.245 trillion rupiah ($120.9 million), the association said.

The government is proposing a subsidy of 1,000 rupiah per litre this year.

U.S. crude oil for July delivery CLc1 was trading near a six-month high above $62 a barrel on Wednesday.

The government had planned to subsidise biofuel for transportation and a price formula had recently been agreed by the industry but these have yet to take effect despite the implementation of a mandatory biofuel policy since January. (Reporting by Fitri Wulandari; Writing by Dicky Kristanto; Editing by Ed Davies)