Indonesia’s finance minister proposes charging ships passing through Malacca Strait

Indonesian Finance Minister Purbaya Yudhi Sadewa has proposed the possibility of imposing charges on vessels passing through the Malacca Strait, placing Indonesia’s position along one of the world’s busiest maritime corridors at the centre of renewed economic discussion.

The proposal emerged as one of the most widely read business stories on Wednesday (22 April), alongside the minister’s decision to dismiss two Director Generals at the Ministry of Finance.

Reference to Strait of Hormuz model

Speaking at the PT SMI 2026 Symposium in Jakarta, Purbaya outlined a hypothetical framework under which Indonesia could levy fees on ships transiting the Malacca Strait.

He drew comparisons with measures associated with the Strait of Hormuz, where Iran has pursued policies involving charges on passing vessels.

Purbaya said Indonesia’s longstanding position along strategic global trade and energy routes has not yet been fully utilised in terms of revenue generation.

“And as directed by the President, Indonesia is not a peripheral country; we sit on strategic global trade and energy routes. Yet ships pass through the Malacca Strait without being charged—one wonders whether that is appropriate,” he stated.

Revenue-sharing concept with neighbouring states

The minister suggested that any such mechanism would require coordination with Malaysia and Singapore, which also border the strait.

Under his illustration, revenue collected from shipping could be distributed among the three countries, either equally or in proportion to the length of waters traversed.

He indicated that Indonesia and Malaysia could potentially receive a larger share, reflecting their wider maritime areas, while Singapore’s portion would be comparatively smaller.

“If we divide it among Indonesia, Malaysia, and Singapore, it would be quite significant,” he said, while noting that the idea remained conceptual.

Acknowledgement of practical constraints

Despite outlining the potential fiscal benefits, Purbaya stressed that implementation would not be straightforward.

He acknowledged legal, diplomatic, and operational complexities surrounding international shipping routes, particularly those considered vital to global commerce.

“If it were possible—but it is not that simple,” he remarked, adding that Indonesia should approach such strategic considerations in a measured manner.

He also emphasised that Indonesia does not intend to exploit maritime chokepoints solely for revenue purposes, pointing to broader ethical and diplomatic considerations.

Strategic context from presidential direction

The proposal aligns with broader remarks by President Prabowo Subianto, who has repeatedly highlighted Indonesia’s geographic importance in global trade and energy distribution.

During a Cabinet working meeting on 8 April, Prabowo underscored how narrow maritime passages can influence global markets, citing developments in the Strait of Hormuz amid geopolitical tensions in the Middle East.

“The conflict in the Middle East proves that a single strait can determine the fate of many nations and influence oil prices,” he said.

He added that Indonesia occupies a similarly critical position, noting that a substantial share of East Asia’s energy supplies and trade flows passes through Indonesian waters, including the Malacca Strait as well as the Sunda and Makassar straits.

According to the President, this strategic location places Indonesia at the centre of international attention, particularly in relation to energy security for countries such as Japan, South Korea, Taiwan, and China.

While no formal policy has been announced, Purbaya’s remarks have introduced a new dimension to discussions on Indonesia’s maritime strategy and fiscal policy.

The concept remains under consideration, with officials signalling that any move would require extensive regional coordination and careful evaluation of international implications.