News From The Ministry Of Industry: Palm Oil DMO And DPO Policy Effective From 31 May

JAKARTA - The Ministry of Industry revealed that the domestic market obligation (DMO) and domestic price obligation (DPO) policies for crude palm oil (CPO) will take effect from the end of this month. This policy replaces the bulk cooking oil subsidy program that has been taking place using funds from the Palm Oil Plantation Fund Management Agency (BPDPKS).

The Director General of Agro Industry at the Ministry of Industry (Kemenperin) Putu Juli Ardika said the decision to terminate the bulk cooking oil subsidy program would be taken after two new regulations were issued regarding the follow-up to the opening of the export of cooking oil and its derivative raw materials.

Putu said the first rule is the Regulation of the Minister of Trade (Permendag) Number 30 of 2022 concerning Provisions for the Export of Crude Palm Oil, Refined, Bleached and Deodorized Palm Oil, Refined, Bleached, and Deodorized Palm Olein and Used Cooking Oil, which was issued on May 23, 2022.

Then, Putu continued, the second rule is the Minister of Trade Regulation Number 33 of 2022 concerning Governance of Bulk Cooking Oil in the Domestic Market Obligation (DMO) and Domestic Price Obligation (DPO) System Policies.

On that basis, Putu said, the Ministry of Industry, which this time is included in the commodity distribution system, will eliminate bulk cooking oil subsidies starting May 31, 2022.

Currently, Putu continued, his party is just waiting for the signature of the Minister of Industry Agus Gumiwang for the third amendment regarding the determination of the bulk cooking oil supply program within the framework of BPDPKS funding or subsidized cooking oil.

"On May 31, the subsidized bulk migration program will be replaced by DMO and DPO policies," Putu said at a Working Meeting with Commission VII DPR RI, Tuesday, May 24.

In addition, Putu explained that the Bulk Cooking Oil subsidy program has succeeded in reducing the price of cooking oil in the market.

"When the program is released, the increase is the highest, then when simple and premium packaging is released, the bulk price also increases. From there this program also controls prices so it is considered quite good. So the program returns to DMO," he explained.

Regarding the amount of DMO that will be determined, Putu explained that the government is still discussing it. But what is certain, the fulfillment target is 10,000 kilo liters (kl) per day. Meanwhile, the community's need for bulk cooking oil is 3.7 million tons per year.

"We are already above 10,000, the directive is just like that, being formulated by the Ministry of Trade so that at least 10 million tons per year, so 3 times the need per year. For the time being, the decision is not yet known for sure," he said.