REPUBLIKA.CO.ID, JAKARTA - The government would not revise or cut the exit tax of its crude palm oil (CPO) exports, although Malaysia had revised for the September-October 2014 period following CPO price fall, a minister stated.

"We have our own regulations, so we cannot cut exit tax. We will continue with the current  regulations," affirmed Minister of Trade Muhammad Lutfi during a press meeting on Friday.

Lutfi said, currently, the assumption of domestic oil industry was that CPO prices would continue to decline.

However, with the mandatory 10 percent biodiesel blending program applicable from the last quarter of 2014, a transition will occur where raw materials, which were initially exported, have to be used for domestic supply. Currently, the government has been implementing a 10 percent biofuel mix on fuel oil (BBM) or B10. Biofuel will be increased to 20 percent in 2016, which is estimated to reach 8 million kiloliters.

"If the mandatory 10 percent biodiesel is successful in 2014, then I hope the raw material for export can be used to fill that need. If it happens, then prices will stabilize as at this time," said Lutfi.

He added that if the mandatory 10 percent biodiesel could be achieved, then in the future the biodiesel mix should be raised to 30 percent.

One of the largest palm oil producers, Malaysia, has eliminated export tax for palm varieties for the next two months. The Ministry of Plantation Industries and Commodities Malaysia claimed that the shipments for September and October would not be subject to a levy that is intended to increase sales and boost the price of the commodity.

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