Entrepreneurs Request to Postpone the Increase in Palm Oil Export Levy

The government plans to increase the Export Levy (Pungutan Ekspor–“ PE ”) for palm oil to between 4.5 and 10 percent as a result of implementing the mandatory blending of B40 biodiesel. The plan to increase the PE is considered by the Chairman of the Indonesian Palm Oil Association (Gabungan Pengusaha Kelapa Sawit Indonesia– “ GAPKI ”), Edy Martono, to worsen the cost burden of palm oil export overseas. According to him, the PE increase will raise the cost burden to 239 US$/metric ton (“ MT ”) from 216 US$/MT.

According to Edy, the reason for increasing the PE to subsidize B40 is too hasty. He believes the government needs to allow some time and conduct an evaluation to assess the urgency of raising the PE for palm oil products.

"Since this has already become a government program and was only implemented in February, it doesn't feel right to revise it now. It would be better to let it run first while being evaluated," Edy told Hukumonline.

Edy hopes that the government will involve business actors in discussions regarding the planned PE increase. So far, the PE increase plan outlined in the revision of Regulation of the Minister of Finance has not included input from business actors.

“This is different from a Law or a Regulation of the Government —this kind of regulation can be changed at any time,” he added.