Crises keep emerging along the world’s vital maritime chokepoints. Indonesian Minister of Finance Purbaya recently stated that Indonesia is exploring plans to levy fees on vessels passing through the Strait of Malacca, immediately sparking widespread controversy. He later clarified, however, that Indonesia will abide by the United Nations Convention on the Law of the Sea (UNCLOS) and will not charge ships navigating the waterway. In his earlier remarks, Purbaya admitted that Indonesia drew inspiration from Iran.
Surging global oil prices driven by conflicts in the Middle East have further strained Indonesia’s already fragile fiscal situation. Much like the Strait of Hormuz, the Strait of Malacca is not under the exclusive control of Indonesia alone. Purbaya’s remarks drew fierce opposition from Singapore and other countries right away.
Zhou Shixin, Director of the Southeast Asia Research Center at the Shanghai Institutes for International Studies, pointed out that Indonesia is currently facing tight fiscal constraints. Purbaya’s proposal was merely a personal proposition and has not been adopted as an official national policy. He further analyzed that unlike the Strait of Hormuz, alternative shipping routes exist for the Strait of Malacca, though these options would substantially raise global shipping costs. Meanwhile, any unilateral toll collection by Indonesia would face opposition and pressure from major powers, likely resulting in more losses than gains for the country.
Strong Opposition from Singapore
Speaking at a seminar held in Jakarta on the 22nd, Purbaya said, “Indonesia is no peripheral nation. We are located along a critical global trade and energy corridor, yet vessels passing through the Strait of Malacca pay no dues.” He added that Indonesia might benchmark Iran’s model of imposing transit fees on ships sailing through the Strait of Hormuz, drawing extensive international attention.
Both the Strait of Malacca and the Strait of Hormuz serve as pivotal maritime chokepoints for global shipping. On the 23rd, Haji Babaei, Deputy Speaker of Iran’s Islamic Consultative Assembly, announced that Iran has received its first batch of transit fees for the Strait of Hormuz, which have been deposited into the central bank’s accounts. Tehran stated that the revenue will be allocated to post-conflict reconstruction efforts.
As vessel traffic through the Strait of Hormuz—a key global energy shipping artery—faces widespread disruptions, the security of other vital maritime routes has come under heightened scrutiny.
Shortly after Purbaya’s toll proposal on the 22nd, Singapore, one of the co-managing parties of the Strait of Malacca, voiced strong opposition. Vivian Balakrishnan, Singapore’s Minister for Foreign Affairs, stated that Singapore will not participate in any arrangements restricting maritime access or imposing transit fees, emphasizing that the Strait of Malacca must remain open.
Most ships traversing the strait dock at Singapore’s ports, establishing the country as one of the world’s core shipping hubs. Toll charges in the Strait of Malacca would severely undermine Singapore’s economic interests. Singapore previously opposed Iran’s toll plan for the Strait of Hormuz as well. Vivian Balakrishnan stressed that the Strait of Hormuz is an internationally recognized waterway under international law, and Singapore will not negotiate safe passage with Iran, as such actions would contradict the nation’s long-standing commitment to UNCLOS and international legal principles.
On the 23rd, Malaysian Minister of Foreign Affairs Mohamad Hasan also remarked, “Any actions concerning the Strait of Malacca require joint participation from Malaysia, Singapore, Indonesia and Thailand. This is our shared consensus, and no single country may act unilaterally.”
Indonesia’s Severe Fiscal Hardships
To ease tensions triggered by the finance minister’s remarks, Indonesian Minister for Foreign Affairs Sugiono issued a prompt clarification on the 23rd. He confirmed that Indonesia will not impose tolls on vessels in the Strait of Malacca, as such a measure would violate UNCLOS. He underscored that the convention grants Indonesia archipelagic state status on the premise that the country cannot levy transit fees on straits within its territorial waters.
Since taking office, Indonesian President Prabowo Subianto has launched costly fiscal initiatives such as free nutritious meal programs, placing immense pressure on national finances. Escalating oil prices and inflation amid ongoing conflicts involving Iran have compounded the fiscal burden. To cut expenditure, the Indonesian government has been forced to scale back the free meal program, saving approximately 40 trillion Indonesian rupiah (roughly 15.9 billion Chinese yuan).
Notably, Indonesia first floated the idea of charging ships in the Strait of Malacca more than two decades ago. At that time, pirates often lurked in secluded bays on Indonesia’s Sumatra Island, along the western side of the strait, hijacking cargo and oil tankers. Indonesia once proposed collecting fees from passing vessels to fund regional maritime security operations.
Linking the Indian Ocean and the Pacific Ocean, the Strait of Malacca is an indispensable trade artery connecting Europe, the Middle East and East Asia. According to a report by the U.S. Energy Information Administration (EIA), an average of 23.2 million barrels of crude oil were shipped via the Strait of Malacca daily in the first half of 2025, accounting for approximately 29% of global seaborne crude oil trade.