Artikel Havina Mirsya \'afra, S. Sos.(DINAS KOMUNIKASI, INFORMATIKA DAN STATISTIK) 29 Oktober 2026 07:31:37 WIB

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Written by:

Rudy Rinaldy (Head of the Communication, Informatics, and Statistics Office of West Sumatra)

Yosi Suryani (Padang State Polytechnic)

 

I. The Singapore-style transfer pricing model that disadvantages Indonesia.

This involves setting the selling price of export commodities through agreements made between companies belonging to the same corporate group. Indonesia’s natural resources are sold to an affiliated company in Singapore at an intentionally low price. Subsequently, another entity within the same group sells these products globally at a significantly higher price. For Indonesia, the consequence is minimal profit—or even a loss—and a relatively small amount of tax revenue reaching the state treasury. Conversely, for Singapore, the profit is substantially higher, while the tax burden there remains minimal.

Why is Singapore under scrutiny?

There are three key points to keep in mind:

1. Tax rates and incentives : In Singapore, the corporate tax rate is 17%, but with various incentives, the effective rate can fall below 10%. In contrast, the rate in Indonesia is 22%.

2. Tax treaty network : Singapore has over 90 tax treaties with other countries, making it easier to manage cash flows without incurring double taxation.

3. Confidentiality and ease of business : Establishing a trading company in Singapore is very straightforward.

Our coal and palm oil products are sold at low prices to affiliates based in Singapore. These affiliates then perform minimal processing—creating downstream products—before selling them at a higher price. We are left only with the waste, while the tax revenue we collect remains minimal. According to a report by the Tax Justice Network, Indonesia suffers losses amounting to between SGD 4 billion and 5 billion annually.

However, this is not because Singapore is "malicious" or "unscrupulous"; rather, it is because our own companies utilize Singapore as a repository to reach their profits.

 

II. Trade Balance : West Sumatra vs. Singapore

According to BPS (Statistics Indonesia) data for the period of January–August 2026, West Sumatra’s total imports reached US$ 784.48 million (an increase of approximately 123% compared to the same period the previous year). Of this total, US$ 446.89 million (about 57%) was imported from Singapore, followed by US$ 14.29 million (1.82%) from Malaysia. Specifically, 83.43% of the imports from Singapore consist of mineral fuels (HS 27)—namely, fuel with an RON rating of 90 or higher—while the remaining ~16% comprises animal feed residues and fertilizers.

There are at least four points that are deeply concerning:

1. West Sumatra imports fuel from a country that possesses no oil wells. Singapore merely operates refineries and storage tanks; crude oil from Indonesia and the Middle East is shipped to Singapore for processing, after which the refined products are sold back to us at a substantial margin.

2. We export raw materials while importing finished goods. West Sumatra exports CPO (crude palm oil) and palm products, yet it imports fuel from Singapore at a price more than three times higher.

3. Teluk Bayur Port functions solely as an unloading point rather than a hub for value-added activities. We pay US$ 446.89 million annually to Singapore simply to purchase fuel—a product we could process ourselves if we had our own refinery.

4. There is a heavy reliance on foreign vessels (tankers), particularly for bulk exports. This reflects the broader reality of maritime logistics in West Sumatra, resulting in long wait times for vessels tasked with transporting export commodities.

At this point, it becomes clear that Singapore’s role is quite ‘impressive,’ even though, in reality, they are essentially nothing more than ‘middlemen.’ They possess no oil palm plantations, yet they have become the world’s largest traders of crude palm oil (CPO). They have no crude oil reserves, yet they are the largest oil traders in Asia. Furthermore, they have no forests, which spares them from any accusations regarding the haze caused by forest and land fires.

To compensate for this ‘resounding defeat,’ it would not be unreasonable to propose that companies with the largest stakes in palm oil processing be required to establish their headquarters in Indonesia—perhaps in West Sumatra, Kalimantan, or other regions. As long as the refineries, trading operations, and financial headquarters remain in Singapore, West Sumatra will continue to import fuel from Singapore—even though we know the funds for those purchases ultimately originate from the palm oil industry.

 

III. West Sumatra: A province where downstream industrialization remains incomplete.

Facts:

a. We possess palm oil, gambier, and rubber; however, these are exported via Belawan in North Sumatra and Dumai in Riau, with their prices determined in Singapore and Kuala Lumpur.

b. Our fuel (BBM) imports are handled through traders in Singapore, with prices set by Singapore.

As an autonomous region, there are three steps we can take to counter this dominance and the ‘hegemony’ of Singapore:

1. Transform Teluk Bayur Port into more than just a loading and unloading facility. How much foreign exchange is lost simply by importing fuel from Singapore? Quantifying this loss will provide a basis for West Sumatra to present a proposal to the Central Government, arguing for the establishment of a mini-refinery or a dedicated fuel terminal.

2. Promote the creation of a regional energy-owned enterprise (BUMD). Provinces like Aceh (with PT. Pembangunan Aceh) and Riau (with PT. Riau Petroleum) serve as models. West Sumatra could establish its own energy-focused BUMD (e.g., PT Sumbar Energi) to participate in the fuel trade, rather than leaving the entire process to Pertamina Patra Niaga or traders based in Singapore.

3. Foster public literacy regarding "grassroots downstreaming" (hilirisasi rakyat). The youth of West Sumatra should be aware that for every liter of fuel purchased at a gas station, nearly US$ 0.50 of the cost flows through Singapore. Therefore, the concept of grassroots downstreaming must evolve into a popular movement—ensuring that we capture added value from every product we produce.

 

IV. The Transformation of Teluk Bayur Port:

       From a Loading/Unloading Point to a Value-Added Hub.

Based on the BPS (Statistics Indonesia) data mentioned above, approximately IDR 7 trillion is sent to Singapore annually to import fuel. This is not merely an economic issue; it is a matter of regional pride and dignity.

Teluk Bayur Port serves as the primary gateway and a symbol of West Sumatra’s prestige. We must not allow our main gateway to be controlled by others who then reap the profits. Our next task is to transform Teluk Bayur Port—the pride of the Minangkabau region—from a simple loading and unloading facility into a hub with a broader, more significant role: a port capable of generating revenue for West Sumatra.

Milestones :

1. Short-Term : Securing Foreign Exchange

This involves constructing an Integrated Fuel Terminal and establishing a regional government-owned energy enterprise (BUMD) at Teluk Bayur (tentatively named PT Sumbar Energi). Currently, we import fuel from traders in Singapore due to a lack of sufficient storage tanks and buffer refineries in West Sumatra, leaving us heavily dependent on Dumai and Singapore. By developing these facilities, we could procure fuel directly from refineries in Dumai or Balongan, bypassing Singaporean traders. This would result in foreign exchange savings of approximately IDR 1 trillion to IDR 2 trillion annually. Concurrently, our regional energy enterprise would capture the trading fees that currently flow to Singapore. Therefore, we must collaborate with Pertamina, Pelindo, and the regional energy enterprise to construct storage tanks with a capacity of 10,000 KL within the Teluk Bayur Port area.

2. Medium-Term : Reversing Export Flows

Exports of CPO (crude palm oil) and gambier should be routed through Teluk Bayur Port. At present, a significant portion of West Sumatra’s CPO is exported via the ports of Dumai and Belawan. To address this, an incentive policy should be implemented—for instance, offering a 30% discount on levies for vessels loading CPO at Teluk Bayur. In tandem, we must develop a CPO bulking station and a mini-refinery within the Teluk Bayur Port area.

3. Long-Term : Establishing Teluk Bayur Port as a Logistics Hub for the West Coast

This initiative is designed to align with the completion of the Pekanbaru–Padang toll road, positioning Teluk Bayur Port to serve as a "maritime toll road" (sea highway) for the West Coast. Even if the Pekanbaru–Padang toll road becomes operational, if Teluk Bayur Port fails to function as a hub, goods produced in West Sumatra will continue to be routed through the Strait of Malacca to Singapore.

West Sumatra must have the courage to propose to the President that Teluk Bayur Port be designated as the primary port for the western side of Sumatra—one with direct connections to India and the Middle East, eliminating the need for transit via Singapore. Furthermore, we could propose the establishment of a Bonded Zone or a Limited Free Trade Zone (FTZ) specifically for downstream industries (such as those producing cooking oil, rubber, and similar goods).

 

V. Can West Sumatra Compete with Singapore?

An intriguing question—one that might even draw laughter from others. Perhaps a more fitting question would be: can we become the antithesis of Singapore? We could shape the "West Sumatra 2045" vision around a truly ambitious agenda, especially given the region’s abundant agricultural resources and various opportunities. Singapore’s immense strength stems from three key pillars : Trading, Transit, and Trust.

Therefore, the essential elements for becoming the antithesis of Singapore lie in:

1. Upstream : Not just downstream.

Singapore lacks an upstream sector and operates solely in the downstream space; they possess neither mines nor palm oil plantations. Our strength lies in the fact that we control the upstream—we hold the actual commodities. As long as we retain control over the upstream, Singapore will always need us. Our vision is to transition from "Upstream Ownership" toward becoming a "Global Power."

2. Downstream Processing (Hilirisasi) : Moving beyond the export of raw materials.

In the future, instead of selling crude palm oil (CPO), we should sell cooking oil, biofuels, cosmetics, and more. Instead of selling raw gambier, we should offer pharmaceutical products, inks, dyes, and other derivatives. The added value will belong to West Sumatra (Sumbar), not to Orchard Road. This can gain global reach under the banner of "Ranah Minang Downstream Processing."

3. Hub : Not a "spoke."

For decades, Teluk Bayur has functioned merely as a "spoke," with the primary "hub" located in Singapore. By transforming into a hub, vessels could sail directly from Teluk Bayur to destinations like Jeddah, India, and beyond, without needing to transit through Singapore. If this is realized, Singapore will certainly feel the impact.

4. Halal Hub : West Sumatra’s primary strategic asset.

A "World’s Halal Hub" from the land of Minangkabau (Ranah Minang). Singapore can never truly become a world-class Halal Hub, but West Sumatra has the potential to do so—covering halal rendang, halal CPO, halal cosmetics, and more. If West Sumatra were designated as a global authority for halal certification, all relevant goods would have to pass through the region to obtain their halal credentials.

5. Human Capital : Maritime and digital talent.

Singapore is truly remarkable and highly advanced; its population of approximately 6 million people is entirely productive. Through the "Digital Maritime Youth" (Anak Mudo Maritim Digital) initiative, we are encouraging the young people of West Sumatra to go beyond simply being TikTok creators; instead, we want them to become digital CPO (crude palm oil) traders, port logistics experts, specialists in halal certification, and more.

 

 

If in the past we were mere laborers on our own land,

then in the future we must be capable of becoming the masters of our own ports.  

 

 

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• Teluk Bayur Port is our Wallet: Sebuah Usulan & Pandangan Tentang Masa Depan Pelabuhan Teluk Bayur