Indonesia to raise palm oil export levies

Jakarta

INDONESIA'S chief economic minister, Airlangga Hartarto, said on Wednesday that the government plans to increase palm oil export levies to support expansion of its palm biodiesel programme.

"The increase is currently being calculated, whether it will be a flat increase or progressive," he told reporters. Further details on the plan are still being discussed, he added.

Indonesia, the world's largest palm oil producer, is expanding its biodiesel programme to use more palm oil as a feed stock for transport fuels in order to cut energy imports. The country collects levies to help finance its palm oil policies such as biodiesel subsidies and replanting programmes for smallholders. The levies are currently set at a maximum of US$50 per tonne for palm oil exports, depending on the type of palm product and a government-set reference price level.

Mr Hartarto said that the levies will be increased because the price difference between the biodiesel made from palm oil and standard gasoil - as diesel is called in Asia - has widened.

The government price for unblended biodiesel jumped to 9,539 rupiah (S$0.96) per litre in February, its highest since data become available in mid-2015. In comparison, the February standard diesel price was set at 6,674 rupiah per litre.

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Biodiesel blends, however, are currently sold at local petrol stations at 5,150 rupiah per litre. REUTERS