Indonesia palm oil shippers to pay new levy from end May

Jakarta

PALM oil exports from Indonesia, the world's biggest producer, will be subject to a levy at the end of this month after President Joko Widodo signed rules for implementation of the new tax. "The funds will be solely used for development of palm oil industry, including for biodiesel" subsidies, said Sofyan Djalil, Coordinating Minister for Economic Affairs. The government expects to raise about US$700 million in revenue from the levy every year, he said in Jakarta on Wednesday.

Indonesia has promoted biofuel use to help absorb rising supplies of the world's most-traded cooking oil and to cut carbon emissions. The country boosted the mandated amount of palm blending in diesel to 10 per cent from 7.5 per cent in 2013, and ordered power plants to mix 20 per cent in 2014. The biodiesel subsidy was raised in February to 4,000 rupiah (41 Singapore cents) a litre from 1,500 rupiah.