Can You Make Peace With Rising Cooking Oil Prices?

A buyer looks at cooking oil at a supermarket. (photo: Antara)

JAKARTA - The spike in cooking oil prices is still a hot topic, because the fact that Indonesia is the world's largest CPO producer makes it an irony. The question that arises today, why is the price of cooking oil rising so high?

Cooking oil is one of the commodities that has an important role in the economy of the Indonesian people, because it is one of the nine basic commodities. The significant increase in cooking oil prices was due to the increase in world CPO (crude palm oil) prices, which contributed to the increase in domestic CPO prices and the amount of CPO inventories for the domestic market.

The consequences of this increase in cooking oil prices will certainly have an impact on consumers. Moreover, Indonesian people are very familiar with all-fried dishes. Starting from fried food vendors, food stalls, and of course housewives have felt the impact of rising cooking oil prices.

Indonesian people are very familiar with crackers, and this type of business uses large amounts of cooking oil as one of the main ingredients. Jabodetabek, especially Bekasi, experienced the highest increase in oil prices of around 41.5 percent. This condition certainly has an impact on the cracker frying business.

The cracker industry has been affected by the increase in cooking oil prices. (Photo: Antara)

Government Intervention and Panic Buying

Starting February 1, 2022, the government intervened by setting the Highest Retail Price (HET) for cooking oil starting at IDR 11,500 per liter. Simple packaged cooking oil is IDR 13,500 per liter, and premium packaged cooking oil is IDR 14,000 per liter.

Secretary General of the DPP Indonesian Market Traders Association (Ikappi) Reynaldi Sarijowan assessed that the government's policy did not reach market traders in remote parts of the country. This is evident, the price of cooking oil is still expensive in a number of areas in Indonesia.

According to him, it is certain that HET will not apply in traditional markets because in that market there is a bargaining system, so there is a price agreement. If the government only focuses on modern retail, it will not be able to lower and control the price of cooking oil.

Domestic cooking oil producers are also collaborating with modern retail business actors to allocate simple packaged cooking oil at a price of Rp. 14,000 ahead of last Christmas and New Year's Day. The volume of the allocation of cheap cooking oil reaches 11 million liters which is distributed to every modern retail outlet nationally.

Bulk cooking oil is now prohibited for sale. (Photo: Antara)

Executive Director of the Indonesian Vegetable Oil Industry Association (GIMNI) Sahat Sinaga said the step was taken to suppress cooking oil prices which were also affected by the cycle of crude palm oil or CPO (crude palm oil) commodities in the world market.

On the other hand, there is also panic buying behavior by consumers in buying cooking oil at one price which should not be done. The Indonesian Consumers Foundation (YLKI) criticized the government's intervention that the price of cooking oil at one price was not effective. YLKI views that there are several aspects that need to be highlighted. The first is the weak understanding of consumers regarding panic buying.

"Education and public awareness need to be improved by all parties, reflecting on previous events," said YLKI Daily Executive member Agus Suyatno as quoted by Antara.

Especially since the Ministry of Trade (Kemendag) stopped selling bulk cooking oil since January 1, 2022. The government requires the sale of cooking oil only in packaged form, which will later provide product-related information.

Reasons for Prohibition of Selling Bulk Cooking Oil

The basic reason Indonesia no longer sells bulk cooking oil is because currently almost all countries in the world sell cooking oil in packaged form.

The prohibition on selling bulk cooking oil is contained in the Minister of Trade Regulation (Permendag) Number 36 of 2020 concerning Mandatory Packaged Palm Cooking Oil.

Palm seeds as raw material for cooking oil. (Photo: Antara)

If Indonesia can complete the stability and availability of cooking oil, then we can focus more on encouraging the development of palm oil from upstream to downstream. Of course, sacrifices are needed by prioritizing the interests of the people in terms of the availability of cooking oil.

At a time when cooking oil prices are still expensive at the moment, here are some tips, especially for housewives to save cooking oil:

Choose the best quality cooking oil:

Good quality is not synonymous with expensive prices, coconut oil can be made at home.

Don't waste oil:

Pour oil according to the needs of the food to be fried, meaning not too much, not too little.

3. Use used cooking oil to fry:

Stir frying is the most favorite cooking method in Indonesia, just use used cooking oil because it only uses a little oil.