Palm Oil Levy Collection Reaches Rp14.48 Trillion

The Indonesian Oil Palm Estate Fund (BPDPKS) has collected at least Rp14.48 trillion of export levies on palm oil and its derivatives by December 2018, higher than its target at Rp11 trillion and also rose from total collection in 2017 at Rp13.05 trillion. BPDPKS Fund Collection Director Herdrajat Natawijaya revealed that increase in the shipment of palm oil products, included Crude Palm Oil (CPO), has risen the levy collection amid the CPO price decreased. “Export volume increased and it automatically rose levies collection,” Herdrajat said at a discussion session with journalist in Sari Pan pacific Hotel, Jakarta, Friday (14/12/2018).

Attendees at the event included BPDPKS Director of Finance, General, and Compliance Catur Ariyanto Widodo; BPDPKS Director of Fund Disbursement Edi Wibowo, and BPDPKS Director of Partnership Tulus Budhianto. Being asked about 2019 target, Herdrajat answered that it is not easy to make projection for 2019 since the government has halted CPO export levy amid declining price. He doesn’t know when the halt will last. “We don’t even know how much we can collect in 2019 as the government has prompted to temporary remove the export levy. We can’t leave room for speculation about when it will last,” Herdrajat added. Earlier, the government has issued Finance Minister Regulation No 152/PMK.05/2018 on Amendment to Finance Minister Regulation No 81/PMK.05/2018 concerning Tariff of Service by the Indonesian Oil Palm Estate Fund (BPDPKS) of Ministry of Finance.

The regulation was officially signed on 4 December 2018. The regulation temporarily set levy on palm oil, Crude Palm Oil (CPO) and its derivatives export at zero as current CPO price is below US$ 570 per ton. It sets that BPDPKS will not collect levies on palm oil, CPO, and its derivatives export when CPO prices are below a threshold of US$570 per ton, but will charge between US$ 5, US$ 10, US$ 15, US$ 20, US$ 25 once CPO prices are in a range of US$570-US$619 per ton. The levy will rise to US$ 20, US$30, US$ 40, US$ 50 when prices hit above US$619 per ton. According to Catur Ariyanto Widodo, BPDPKS works normally to implement programs that have been made, though the levy collection is temporary halted given the fact that BPDPKS has a budget surplus that can be used in 2019.

“As a Public Service Agency (BLU), BPDPKS has own right to use current unused fund in the following year. We will give priority to programs set by the government and steering committee,” Catur said. Meanwhile, Edi Wibowo said, as November 2018, BPDPKS had disbursed Rp5.51 trillion for biodiesel incentives. It is projected to reach Rp5.57 trillion at the end of this year. Incentives are disbursed by BPDPKS to biofuel companies to cover the differential between diesel fuel Market Index Prices (MIP) and biofuels MIP. The incentives have decreased Rp2,074 per liter at average this year. Last year, paid incentives were Rp4,075 per liter at average.

BPDPKS aims to disburse incentives at around Rp7 trillion next year. “With the same allocation, there will be more biodiesel to be incentivized to around 6 million kL in 2019,” Edi said. Edi added that B20 distribution is expected to reach 3.3 million to 3.4 million kL by the end of this year. For 2019, it is expected to reach 6.2 million kL. **