Indonesia proposes to impose "Malacca Strait toll"

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Recently, Indonesia’s idea of ​​“levying tolls on ships passing through the Strait of Malacca” has aroused widespread concern in the region and set off a new round of discussions on this important global trade channel. Indonesian Finance Minister Purbaya Yudi Sadeva said the idea was inspired by Iran’s proposed charging model for ships passing through the Strait of Hormuz. However, Singapore and Malaysia quickly expressed their stance, emphasizing the need to adhere to the principle of "freedom of navigation."

According to multiple media reports, Indonesian Finance Minister Purbhaya Yudi Sadeva proposed at a seminar in Jakarta that Indonesia could consider imposing tolls on ships passing through the Strait of Malacca to better utilize its location advantage in a key channel for global trade and energy transportation. He said that this idea was partly inspired by Iran’s proposed charging model for the Strait of Hormuz, and believed that if Indonesia, Malaysia, and Singapore could coordinate cooperation and share benefits, it would likely bring considerable financial returns.

The Strait of Malacca is located between the Malay Peninsula and the Indonesian island of Sumatra. It is the core channel connecting the Indian Ocean and the Pacific Ocean. It has a total length of about 1,080 kilometers and the narrowest point is only about 2.8 kilometers. As one of the busiest sea lanes in the world, the strait is responsible for about 40% of global maritime trade traffic. It is a key passage for Middle East energy to be transported to Asian economies such as China, Japan, and South Korea. It is also an important "lifeline" for China's foreign trade. Data show that in 2025, the annual number of ships passing through the strait will exceed 100,000 for the first time, and its strategic position is no less than that of the Strait of Hormuz, the Suez Canal or the Panama Canal.

However, Purbaya's proposal quickly encountered opposition from relevant countries. As countries sharing the Malacca Strait, Singapore and Malaysia immediately made clear their stance, emphasizing that they must adhere to the principles of "freedom of navigation" and "right of transit passage" and oppose any form of tolls or restrictions on passage.

Singapore's Foreign Minister Vivian Balakrishnan pointed out that the right of transit passage in international shipping straits is a basic right granted by international law, and is not a privilege that coastal countries can attach arbitrary conditions to. "This is not a matter that requires approval or payment." Malaysian Transport Minister Loke Siew Fook also stated that he will continue to uphold the principle of free passage in the Malacca Strait.

From a legal perspective, this proposal does face considerable controversy. According to the United Nations Convention on the Law of the Sea, straits used for international navigation are subject to the "transit passage system". Coastal countries are not allowed to levy tolls on transit ships and can only formulate relevant rules in aspects such as navigation safety and environmental protection. For a long time, channel maintenance in the Malacca Strait has mainly relied on voluntary contributions from user countries and regional cooperation mechanisms.

The Indonesian government quickly provided clarification on this. Indonesian Foreign Minister Sugiyono made continuous statements from April 23 to 24, clearly denying that the charging idea is a government policy. He emphasized that Indonesia, as a party to the United Nations Convention on the Law of the Sea, will continue to abide by relevant international rules, safeguard the principle of freedom of navigation, and will not unilaterally promote the Malacca Strait toll policy.

Analysts believe that the Indonesian Finance Minister’s statement more reflects the country’s desire to enhance its strategic position in the global maritime system and explore how to obtain more economic benefits from key waterways. However, due to the constraints of international law, the coordination of interests of multiple countries, and the stability of the global supply chain, such proposals are unlikely to be implemented in the short term.

At the same time, the shipping industry generally expressed concerns about the idea. If a similar charging mechanism is implemented in the future, it will inevitably increase global shipping costs, especially impacting the Asian energy transportation and manufacturing supply chains that are highly dependent on this waterway. For major trading countries such as China, Japan, and South Korea, the impact is particularly significant.

It is worth noting that although the "Kra Canal" project to replace the Strait of Malacca has been discussed for many years, it is still in the planning stage due to the huge scale of investment and obvious differences among regional countries. It is difficult to change the core status of the Strait of Malacca in the short term.

Overall, although the "collection of tolls" remarks are still at the discussion level, they have triggered a new round of attention on international waterway governance, freedom of navigation and the distribution of geoeconomic benefits. In the context of the global supply chain being highly dependent on key sea lanes, any trends involving rule adjustments will continue to be highly sensitive and closely followed by the international community.