Indonesia to raise palm oil export levy to 4.5% to 10%, official says

JAKARTA :Indonesia will raise its palm oil export levy to between 4.5 per cent and 10 per cent of the crude palm oil reference price, up from 3 per cent to 7.5 per cent, to finance a mandated increase in the amount of the oil used in biodiesel, a plantation fund official said on Tuesday.

Indonesia raised the mandatory amount of palm oil in its biodiesel mix to 40 per cent this year from 35 per cent. It is studying increasing it to 50 per cent in 2026, as well as a 3 per cent blend for jet fuel next year, as it seeks to curb fuel imports.

Kabul Wijayanto, director at the Plantation Fund Agency, which is in charge of collecting and distributing the export levy, said authorities would impose the new rates three days after the regulation is issued.

Wijayanto said the regulation was being processed by the law ministry. The agency was expected to distribute 35.47 trillion rupiah ($2.15 billion) for the biodiesel subsidy this year. The increase in the crude palm oil levy to 10 per cent from 7.5 per cent was flagged by the government late last year, but has so far not been enacted. More refined palm oil products are charged lower levy rates.

($1 = 16,470 rupiah)