Indonesia’s finance minister suggests imposing levy on ships transiting Malacca Strait
Finance Minister Purbaya Yudhi Sadewa said the idea to impose a levy was inspired by Iran’s plan to charge ships passing through the Strait of Hormuz. Singapore and Malaysia have however said that there must be freedom of navigation through the Strait of Malacca.
This handout photograph released by the Indonesian Air Force on March 12, 2014 shows the view from an Indonesian Air Force military surveillance aircraft over the Malacca Strait. (Photo: AFP/Indonesian Air Force)
JAKARTA: Indonesia Finance Minister Purbaya Yudhi Sadewa on Wednesday (Apr 22) floated the idea of imposing a levy on ships passing through the Malacca Strait, as part of a push to maximise the country’s strategic position along global trade and energy routes.
Local media cited Mr Purbaya as saying that the proposal aligns with President Prabowo Subianto’s directive that Indonesia should no longer see itself as a “peripheral nation”, but one that is a “key player” on the global economic stage.
“As the president has instructed, Indonesia is not a peripheral country. We sit on a strategic global trade and energy route, yet ships pass through the Malacca Strait without being charged - I’m not sure whether that’s right or wrong,” Mr Purbaya said at a symposium in Jakarta, as quoted by Detik.
The Malacca Strait is a major shipping lane for global trade and energy, but no levy has yet been imposed on transiting vessels. The strait is primarily bordered by Indonesia, Malaysia and Singapore, and connects the Indian and Pacific Oceans.
Mr Purbaya said the idea to impose a levy was inspired by Iran’s plan to charge ships passing through the Strait of Hormuz. The strait, which connects the Persian Gulf to the Indian Ocean, handles about a quarter of the world’s seaborne oil trade.
It has largely been blocked by Iran since Feb 28 when the United States and Israel launched attacks on the West Asian country. The war is currently in its eighth week.
Mr Purbaya on Wednesday said he believes a similar approach could generate significant economic value if implemented in the Malacca Strait through cooperation among the three littoral states.
“Iran is now planning to charge ships passing through the Strait of Hormuz. If we split it three ways – Indonesia, Malaysia, and Singapore – it could be quite substantial. Our stretch is the largest and the longest,” he reportedly said.
However, Mr Purbaya stressed that implementing such a policy would not be straightforward. Any levy would require agreement with Malaysia and Singapore, which also share territory along the Malacca Strait.
According to him, although Indonesia controls the largest portion of the waters, the policy cannot be decided unilaterally as it involves cross-border interests.
“Singapore is small, Malaysia is similar - perhaps we could split it in two. If only it were that simple, but it isn’t. So with all our resources, we must not think defensively; we need to start thinking more offensively, but in a measured way,” he said.
His comments were reported by various Indonesian news outlets, including Detik, Berita Satu, Inilah.com, Periskop.id and Kompas.
The government currently still views the proposal as an initial idea. Regional coordination and the potential impact on global trade flows will be key considerations before any policy is pursued further, said Mr Purbaya, as quoted by Berita Satu.
Separately, Singapore’s Minister for Foreign Affairs Vivian Balakrishnan said that shipping lanes through the Malacca and Singapore straits must remain open to all. He further stressed that Singapore would not support any effort to restrict them.
“The right of transit passage is guaranteed for everyone,” Dr Balakrishnan said in a fireside chat at a CNBC event in Singapore on Wednesday morning. “We will not participate in any attempts to close or interdict or to impose tolls in our neighbourhood.”
Earlier this month, Dr Balakrishnan said in parliament that Singapore would not negotiate for safe passage through the Strait of Hormuz, as doing so would undermine fundamental principles of international law.
Responding to a parliamentary question from an opposition parliamentarian on whether Singapore would engage Iran or consider paying a toll for its vessels, Dr Balakrishnan stressed that transit through such waterways is a right - not a privilege.
“There is a right of transit passage,” he said on Apr 7.
“It is not a privilege to be granted by the bordering state, it’s not a licence to be supplicated for, it is not a toll to be paid.”
He had emphasised then that the Strait of Hormuz, like the Strait of Malacca and the Strait of Singapore, is a waterway used for international navigation. This right is codified in the United Nations Convention on the Law of the Sea (UNCLOS), to which Singapore is a signatory.
Dr Balakrishnan reiterated that point on Wednesday at the CNBC event, while noting that Malaysia, Indonesia and Singapore are trade dependent economies.
“All of us know it is in our interest to keep it open,” Dr Balakrishnan said, referring to the Straits of Malacca and Singapore.
“Between the three of us, we have a cooperative mechanism, not to collect tolls, but to keep it open and to maintain that position. The point here is that all three countries have a strategic interest and are strategically aligned in keeping it open. That is not something which you can take for granted in many other places,” he said.
Separately, Malaysia’s Transport Minister Anthony Loke on Tuesday expressed a similar stance as he attended the Singapore Maritime Week 2026 at the Suntec Convention Centre.
He said Malaysia remains committed to ensuring freedom of navigation and transit through the Malacca Strait.
“As a sovereign nation and a council member of the International Maritime Organization, we are committed to a rules-based system in which members play their part in respecting international law,” Mr Loke was quoted as saying by state news agency Bernama.
