Trade Minister Enggartiasto Lukita had to revise a regulation on the letter of credit (L/C) before it took effect because of an overlap with a regulation issued by the Energy and Mineral Resources Minister.

Energy and Mineral Resources Ministry oil and gas Director General Djoko Siswanto said the Indonesia Petroleum Association (IPA) had questioned the issuance of Trade Minister Regulation No. 102/2018 on Sept. 7 on the L/C, which was scheduled to take effect on Oct. 7.

The trade minister then chose to revise the regulation.

“They [IPA members] told me they could shut down their operations as their oil tanks will be overflowing if they wait for the L/C. They tried to scare me, which I hate,” he said recalling his talk with members of the IPA.

Djoko further said the old L/C policy could confuse oil and gas players. “Payment in credit doesn’t exist in the oil and gas industry. Hence, they are afraid that it will occur in the future,” he added.

Previously, Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) chairman Amien Sunaryadi said the agency had set up its own system with Bank Indonesia and the Customs and Excise Office to ensure the repatriation of export earnings.

The system allows buyers to transfer the payment to certain banks, Amien said, adding that the system had set its own sanctions of up to Rp 100 million (US$6,584) in fines for exporters who faked the reports of their earnings. (bbn)