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Indonesian government plans to raise palm oil export levy

Christian Fernsby |
Indonesia's chief economic minister, Airlangga Hartarto, said on Wednesday the government plans to increase palm oil export levies to support expansion of its palm biodiesel programme.

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"The increase is currently being calculated, whether it will be a flat increase or progressive," Hartarto told reporters. Further details on the plan are still being discussed, he said.

Indonesia, the world's largest palm oil producer, is expanding its biodiesel programme to use more palm oil as a feed stock for transport fuels in order to cut energy imports.

The country collects levies to help finance its palm oil policies such as biodiesel subsidies and replanting programmes for smallholders. The levies are currently set at a maximum of $50 per tonne for palm oil exports, depending on the type of palm product and a government-set reference price level.

Hartarto said the levies will be increased because the price difference between the biodiesel made from palm oil and standard gasoil as diesel is called in Asia has widened.

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