InfoSAWIT, PEKANBARU – The Riau chapter of the Indonesian Economists Association (ISEI Riau) has urged the central government to revise Indonesia’s palm oil Revenue Sharing Fund (DBH) formula, arguing that the current allocation disproportionately favors the central government and places an increasing fiscal burden on producing regions.
Under the current scheme, 96 percent of palm oil revenue-sharing funds are allocated to the central government, while producing regions receive only 4 percent.
ISEI Riau stated that the mechanism stipulated under Finance Ministry Regulation (PMK) No. 10/2026 on Palm Oil Revenue Sharing Management does not adequately reflect the major contribution of palm oil-producing regions such as Riau to state revenues and export earnings.
ISEI Riau Chairman Herman Boedoyo said producing regions continue to bear the environmental and infrastructure impacts of the palm oil industry without sufficient fiscal support from Jakarta.
“Palm oil-producing regions, including Riau, should not continue to be mere spectators amid the success of Indonesia’s national palm oil industry. This reformulation is a struggle to ensure that natural wealth generated from regional land truly returns to improve local welfare,” Herman said, as quoted by InfoSAWIT from Bisnis on Tuesday (12/5/2026).
According to ISEI Riau, the current DBH formula has failed to support infrastructure development and recovery in palm oil-producing areas. The organization plans to submit recommendations for revising the revenue-sharing formula to the Finance Ministry, House of Representatives (DPR RI), Regional Representative Council (DPD RI), governors, and palm oil-producing regional administrations nationwide.
Data presented by ISEI Riau showed a continued decline in national palm oil DBH allocations over the past four years. National allocations fell from Rp3.40 trillion in 2023 to Rp756.63 billion in 2026.
Riau’s allocation also declined sharply, from Rp392.03 billion in 2023 to only Rp96.11 billion in 2026.
ISEI Riau argued that the current structure relies too heavily on export levies and crude palm oil (CPO) export duties.
“We propose a significant increase in the regional allocation to ensure sustainable local economic development,” Herman concluded. (T2)
