PALMOILMAGAZINE, PEKANBARU – The Riau chapter of the Indonesian Economists Association (ISEI) has urged the central government to immediately revise the current palm oil revenue-sharing fund (DBH) formula, arguing that the existing scheme disproportionately disadvantages palm oil-producing regions.
Under the current distribution mechanism, the central government receives 96% of palm oil revenue-sharing funds, while producing regions receive only 4%. ISEI Riau believes the arrangement has widened fiscal inequality, particularly for Riau Province, one of Indonesia’s largest palm oil-producing areas.
According to ISEI Riau, the provisions outlined in Finance Ministry Regulation (PMK) No. 10/2026 on Palm Oil Revenue-Sharing Fund Management do not adequately reflect the substantial contribution made by producing regions to state revenue and national export earnings from the palm oil industry.
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Chairman of ISEI Riau, Herman Boedoyo, stated that producing regions continue to bear the economic and environmental burdens of the palm oil industry, including damaged infrastructure and environmental pressures, without receiving sufficient fiscal support from the central government.
“Palm oil-producing regions, especially Riau, should not continue to become mere spectators amid the success of Indonesia’s palm oil industry. Reformulating the revenue-sharing scheme is essential to ensure that natural wealth generated from regional land truly benefits local communities,” Herman said, as quoted by Palmoilmagazine.com from Bisnis on Tuesday (12/5/2026).
He added that the current DBH formula has failed to support infrastructure recovery and regional development in major plantation areas. Therefore, ISEI Riau is calling for a redistribution mechanism that would allow producing regions to enjoy a greater share of the economic benefits generated by the palm oil industry.
The demand was previously conveyed during a public discussion and socialization event regarding PMK No. 10/2026 held in Pekanbaru on Tuesday (6/5/2026). During the forum, ISEI Riau emphasized that recommendations for revising the DBH formula would be submitted to the Finance Minister, the House of Representatives (DPR RI), the Regional Representative Council (DPD RI), governors, and local leaders in palm oil-producing regions across Indonesia.
Data presented by ISEI Riau showed that national palm oil DBH allocations have continued to decline over the past four years. In 2023, the national palm oil revenue-sharing fund reached IDR 3.40 trillion before declining to IDR 3 trillion in 2024. The figure dropped further to IDR 1.25 trillion in 2025 and fell sharply again to only IDR 756.63 billion in 2026.
A similar trend occurred in Riau Province and its districts. In 2023, Riau received IDR 392.03 billion in palm oil DBH allocations. The amount decreased to IDR 350.83 billion in 2024, fell to IDR 155.11 billion in 2025, and declined further to only IDR 96.11 billion in 2026.
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ISEI Riau argued that the trend highlights weaknesses in the current DBH calculation structure, which largely depends on export levies and export duties on crude palm oil (CPO).
“We propose a significant increase in the regional allocation to ensure the sustainability of local economies,” Herman concluded. (P2)
