Indonesia to remove import duties on some plastic products and LPG for petrochemical industry
Indonesia plans to remove import duties on some plastic products as well as liquified petroleum gas (LPG) bought by the petrochemical industry to help plastic producers cope with a naphtha shortage, its chief economic minister said on Tuesday.
Coordinating Minister for Economic Affairs Airlangga Hartarto told reporters the measure will take effect in May.
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Domestic prices for plastic have risen between 50% to 100% because of disruptions in the supply of naphtha imported from the Middle East caused by the war in Iran, Airlangga said.
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It could have knock-on effects on other prices because it affects the supply of plastics used for packaging, he said.
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He said the import duty will be cut to 0% on materials used to make plastic packaging, including polypropylene, LLDPE and High-Density Polyethylene (HDPE).
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"We will give everything 0% import duty but only for six months," he said.
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The measure is intended to dampen the increases in the prices of plastics and other products, such as food and drinks packaged in plastic, he said.
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The government will reassess the situation after six months, the minister said.
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Indonesia currently applies import duties of between 5% and 15% on plastic products.
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The duty on LPG imported by the petrochemical industry will also be cut to 0% from 5%, Airlangga said.
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