19/01/2008 (Bernama), Putrajaya - The government will consider abolishing Windfall Profit Levy for palm oil if the crude palm oil price rises further, Plantation Industries and Commodities Minister Datuk Peter Chin said Monday.

"It would be a fairer request to the government to consider abolishing the windfall tax if the crude palm oil price goes beyond RM2,000 a tonne in future.

"The government will consider the planters' appeal. If you say return all the taxes collected, you are like rolling back the situation before the windfall tax was introduced," he told reporters after a dialogue between his ministry and Universiti Putra Malaysia administrators.

He, however, said it was not fair for a refund of the tax that has been paid.

"I've written to the Finance Ministry on behalf of the planters to ask for a repeal of the windfall tax but the Finance Minister has not yet reply," he said when asked on oil palm estate owners wanting the government to refund RM350 million paid in windfall tax in July, August and September last year.

The planters have also appealed to the government to scrap the windfall tax.

Chin also said the government is studying to exchange the olein palm oil for fertilizer components from Iran, Syria, Morocco, Jordan, Cambodia and Vietnam under the 1992 Palm Oil Credit and Payment Arrangement with the support of Bank Negara.

"We are looking at other countries which are also producing fertilizer components, in particular potash and potassium, the two highly-needed ingredients for the manufacturing of fertilizers," he said.

Currently, most of the fertilizers used by Malaysian palm oil producers are imported from Canada and Russia, Chin said, adding that fertilizers accounted for 60 percent of the production cost.

"Therefore, there is a need to find solutions as fertilizer prices have doubled, he added.