Indonesia raises palm oil export tax amid domestic cooking oil shortage

On Friday, the Indonesian government introduced a new regulation to raise the export tax on palm oil to $ 375 per ton to address the country’s cooking oil shortage when the base price for cooking oil reaches $ 1,500 per ton. Announced.

New regulations that came into force soon introduced a higher progressive rate when the base price of cooking oil reached at least $ 1,050 per ton. According to Treasury regulations, for every $ 50 increase in reference price, the levy will be increased by $ 20 up to $ 375 per ton.

Previously, if the reference price reached at least $ 1,000 per ton, the maximum export tax was $ 175 per ton.

Authorities have struggled to manage the domestic market for palm oil-based edible oils after prices soared 40% at the beginning of the year due to global highs.

Two Indonesian women reportedly died after waiting hours in line to buy cooking oil at a minimarket in East Kalimantan. Sandra, a 41-year-old housewife, fainted while she was in the queue for hours and was sentenced to her death on her way to the hospital.

The second woman, 49-year-old Ritaliani, was taken to the intensive care unit after her fall, but died two days later in the Jakarta Post, a local media outlet. report.

Indonesia’s trade minister, Muhammad Rufti, has been charged with “panic policymaking” by some lawmakers after having made at least six legislative changes since January at a parliamentary commission hearing on Thursday.

His ministry also lifted the palm oil export limit, also known as the Domestic Market Obligation (DMO), after being raised from 20% to 30% in late January.

Rufti argued that the rise in global commodity prices since last year was exacerbated by Russia’s invasion of Ukraine and affected all global economies. He assured that palm oil exports would continue to be restricted by high levies even after the DMO was removed.

The government has also lifted the upper limit of 14,000 rupiah (98 US cents) for premium packaged cooking oil and 13,500 rupiah (94 US cents) for secondary quality oil and provided subsidies for bulk cooking oil.

Indonesian President Joko Widodo On twitter On Tuesday, the government decided to subsidize the price of bulk palm oil after considering the rising prices of edible oil, including the global price of palm oil.

The government has allocated more than $ 500 million to subsidize large amounts of cooking oil over the next six months, with approximately 202 million liters being supplied each month. Indonesian exporters are required to pay export tax on the shipment of palm oil in addition to the export tax.

“The government is also paying close attention to the availability and distribution of cooking oil in the market,” Widdo said.

Reuters contributed to this report.

Aldograph Redley


Aldgra Fredly is a Malaysia-based freelance writer featuring the Epoch Times Asia Pacific News.