The Contents Are Cheated And The Selling Price Exceeds The HET, Needs Policies That Do Not Distorte Our Minyakara Prices

Traders showed Minya Kita cooking oil at a jongko at Kosambi Market, Bandung, West Java, Wednesday (8/5/2024). (ANTARA/Raisan Al Farisi/foc/pri)

JAKARTA - The case of alleged mixing of Pertamax fuel oil (BBM) in Pertamina has not subsided, the community has again been shocked by the reported issue of Minya Kita, its contents are not in accordance with the information in the packaging. The producer inflated the contents of MinyaKita as is now circulating in the community because the price of raw materials soared.

Recently, the world of social media was shocked by a number of videos about Minya Kita being sold on the market. The video shows that Minya Kita packaging one liter turned out to only contain about 750 milliliters after being transferred to a measuring cup.

"Be careful, I'm one of the victims. Buy Minya Kita with the words 1 liter when charged is only 750 ml. Buy it for 1 liter," wrote the Tiktok account @miepejuang.

The video quickly spread to the public, which finally helped re-measure the dose of the content of Minya Kita. The result was the same, a number of social media users found that Minya Kita's cooking oil was not in accordance with the packaged information.

Minister of Agriculture Andi Amran Sulaiman responded to the noise on social media by conducting an inspection at the Lenteng Agung Market, Jagakarsa, South Jakarta. He found that the contents of the Minya Kita packaging did not match what was stated on the label. However, there are still other packaging that match the label.

"The volume (Minya Kita) is not appropriate, it should be 1 liter but only 750 to 800 milliliters. This is a form of fraud that harms the people, especially in the month of Ramadan when the need for basic commodities increases," said Andi Amran.

Minister of Agriculture Andi Amran urged that the producer of Minya Kita be convicted and threatened to close the factory if found guilty. Currently, there are three business entities that produce Minyakitan, namely PT Artha Eka Global Asia in Depok, the Nusantara Integrated Group (KTN) cooperative in Kudus, and PT Runas Agro Indolestari in Tangerang.

"We ask for processing and if found guilty, we ask that this factory be closed and their products are sealed," Amran said.

Agricultural activist from the Indonesian Political Economy Association (AEPI) Khudori said the price of Minya Kita above HET was actually not new. According to his observations, this phenomenon has occurred since at least mid-2023.

Regarding the existence of a company suspected of cheating by circumventing the contents of MinyaKita, Khudori assessed that this happened because the cost of the product had exceeded the HET.

The price of crude palm cooking oil (CPO) in the country for the last six months is around Rp. 15,000 to Rp. 16,000 per kg. The price of this raw material is much higher than the calculation of the CPO price set by the government for Minyakitani raw materials, which is Rp. 13,400 per kg.

"This has just calculated the raw material for CPO, which has not taken into account the cost of processing, distribution costs, and business profit margins," said Khudori in a statement received by VOI.

Therefore, producer Minya Kita was unable to cover the difference in production costs. And this is what makes producer Minya Kita cheat in the field, including the volume content that is not 1 liter as stated in the label. With the current CPO price level, producers are unable to sell MinyaKita to Distributor 1 (D1) a maximum of IDR 13,500 per liter.

"Which entrepreneur is strong if they continue to lose money? Which business is sustainable if they have to sell below the production price," he added.

For this reason, Khudori said the need for policy corrections in responding to the increase in raw materials. If there is no policy correction, there are two possibilities that will occur in the future. First, producers sell Minya Kita according to HET but at the expense of quality.

"Sending down the contents of the packaging can be included in the context of 'preserving quality'," he said.

Second, producers continue to produce MinyaKita according to quality (including not circumventing content) but selling at prices above HET. That both are at risk and violate the rules, yes. But if the existing rules do not allow business to exist and sustain without violating the rules, which is to blame employers or regulators? Or both?

Minya Kita has increased to Rp15,700 per liter which is valid since August 14, 2024. This is in accordance with the Regulation of the Minister of Trade (Permendag) Number 18 of 2024. The existence of this Permendag is one of the objectives of ensuring the availability of domestic cooking oil through a mandatory domestic market supply scheme (DMO).

Fulfillment of the DMO is a requirement for CPO exporters to obtain export permits from the government with a certain ratio according to market dynamics. But this DMO scheme has weaknesses, one of which is not accommodating CPO price fluctuations as a raw material for cooking oil.

When the price of CPO automatically rises, the price of Minya Kita also increases. On the other hand, when the price of CPO drops, the price of MinyaKita in consumers does not automatically fall. In addition, this regulation also has the potential to inhibit exports and reduce state revenues.

In the field, not a few people buy Minya Kita at prices above the predetermined HET. Therefore, Khudori advised the government to cut the distribution of Oilita so that it is not as long as it is now. According to him, the government can involve BUMN (Bulog and ID Food) in the distribution of MinyaKita.

The reason is, the government's version of the MinyaKita distribution is considered too long, starting from producers to distributors I (D1) selling for Rp. 13,500/liter, then D1 to D2 for Rp. 14,000/liter, D2 to retailers of Rp. 14,500/liter, and retailers to consumers of Rp. 15,700/liter.

"In the future, the government needs to make policies that do not distort prices. If the government wants to subsidize Minya Kita for the poor/vulnerable and MSME groups, it is better if it is done with cash transfers and money can only be used to buy Oilita, it cannot be disbursed or used to buy others," Khudori concluded.