Indonesia will officially apply a $50/mt tariff to crude palm oil exports and a $30/mt export tax on processed palm products on Thursday, a delay from the previous plan of July 1, palm oil fund agency, Indonesia Estate Crop Fund, Bayu Krisnamurthi told reporters Tuesday. The levy will be used to support biodiesel use because previously the program was difficult to implement due to the price gap between gasoil and biodiesel. This second delay will mean biodiesel use this year will be about 1.8 billion-2 billion liters, Krisnamurthi said. The original implementation date was supposed to be in the last week of May.
Indonesia had originally estimated it would be able to reduce gasoil imports by 3.975 billion liters this year following the government's move to increase the biodiesel mandate to 15% from 10% from April 1. But then the estimated reduction was revised down to 2 billion-2.3 billion liters if the levy were to have started on July 1. The levy will be used to give biodiesel producers a subsidy of about Rupiah 600-700/liter ($0.045-$0.050). This subsidy is on top of current subsidy of Rupiah 1,000/liter that has been provided from the government budget. However the agency's subsidy could change depending on the crude oil price, Krisnamurthi said. The agency estimates it will be able to collect Rupiah 3.5 trillion-4 trillion this year from the levy, he added. Indonesia is currently the leading global exporter of palm oil, on around 17 million mt a year.
Indonesia will officially apply a $50/mt tariff to crude palm oil exports and a $30/mt export tax on processed palm products on Thursday, a delay from the previous plan of July 1, palm oil fund agency, Indonesia Estate Crop Fund, Bayu Krisnamurthi told reporters Tuesday. The levy will be used to support biodiesel use because previously the program was difficult to implement due to the price gap between gasoil and biodiesel. This second delay will mean biodiesel use this year will be about 1.8 billion-2 billion liters, Krisnamurthi said. The original implementation date was supposed to be in the last week of May. Indonesia had originally estimated it would be able to reduce gasoil imports by 3.975 billion liters this year following the government's move to increase the biodiesel mandate to 15% from 10% from April 1. But then the estimated reduction was revised down to 2 billion-2.3 billion liters if the levy were to have started on July 1. The levy will be used to give biodiesel producers a subsidy of about Rupiah 600-700/liter ($0.045-$0.050). This subsidy is on top of current subsidy of Rupiah 1,000/liter that has been provided from the government budget. However the agency's subsidy could change depending on the crude oil price, Krisnamurthi said. The agency estimates it will be able to collect Rupiah 3.5 trillion-4 trillion this year from the levy, he added. Indonesia is currently the leading global exporter of palm oil, on around 17 million mt a year.
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