Indonesia has partially lifted its requirement for certain exports to be sold only on letter of credit (L/C) terms.

In the wake of sustained low oil prices the Indonesian government has now relieved oil and gas exporters of the L/C requirement.

Export support

"Oil and gas exports are expected to be smoother with the exemption of L/Cs for the sector," energy minister Sudirman Said told local media.

He said the government took the step to support exports and attract more investment to the upstream oil and gas sector.

Commodity controls

Legislation introduced earlier this year specified that L/Cs must be used for exports of four primary commodities (DC World News, 16 February 2015).

The four commodities under the initial legislation were coal; palm oil and palm-kernel oil; oil and gas, and minerals. The L/C requirement remains in place for all except oil and gas exports.

Problems

The scheme has proved problematic. Indonesia's top miner, PT Timah, emerged alongside other large metals and minerals producers to struggle with the country's new legislation.

They included the Indonesian unit of Freeport-McMoRan, which runs one of the biggest copper mines in Indonesia. It had to halt its exports as it attempted to conform to the new L/C regulations, (DC World News, 17 August 2015).

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