Seatrade-Maritime: Indonesian Finance Minister moots Malacca Strait toll

Iran’s move to charge a toll for the Strait of Hormuz is reported to have sparked Indonesia’s Finance Minister Purbaya Yudhi Sadewa to suggest the same idea for the Malacca Strait.

One of the world’s busiest international shipping lanes the Malacca Strait saw 102,525 transits by vessels over 300 gt last year, or an equivalent of 281 per day, and is bordered by Indonesia, Malaysia, and Singapore.

Iran’s de facto closure of the Strait of Hormuz in the conflict with US and Israel, and starting to charge a toll of up to $2 million for vessels it approves for transit, has put the Malacca and Singapore Straits in focus. In particular Singapore has been resolute in its defence of the freedom of navigation under UNCLOS.

Indonesia’s Finance Minister Purbaya is reportedly taking a rather different tack.

“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,”Purbaya said at a symposium in Jakarta, quoted by local media.

“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, such a move by Indonesia would not be straightforward as it would requirement the agreement of Malaysia and Singapore, which Purbaya acknowledged. 

The Strait is governed by cooperative mechanism between Singapore, Malaysia, and Indonesia established in 2007.

Speaking on CNBC on 22 April Singapore’s Foreign Affairs Minister Vivian Balakrishnan highlighted the cooperative mechanism. “We do not have tolls. All of us are trade-dependent economies. All of us know it is in our interest to keep it open,” Dr Balakrishnan said.

“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.”

At the 34th Meeting of the Aids to Navigation Fund (ANF) Committee last week the Maritime & Port Authority of Singapore (MPA) said in a social media post: “During the meeting, the littoral States reaffirmed their commitment to keeping the SOMS (Straits of Malacca and Singapore open and safe, in accordance with international law.” The ANF is one of three pillars of the cooperative mechanism.

Indonesia has also ratified UNLCOS which enshrines the right of freedom of navigation.