Government Efforts To Reduce Cooking Oil Prices, Distribute 11 Million Liters To Open Subsidy Options

Cooking Oil Illustration (Photo: Pixabay)

JAKARTA - The price of cooking oil has soared in recent times. The increase did not only occur in packaged cooking oil, but also in bulk cooking oil. To suppress the ever-increasing price, the government intervened by disbursing 11 million liters of cooking oil. In fact, the government has also opened a subsidy option.

As is known, the government through the Ministry of Trade has actually set the highest retail price (HET) for simple packaged cooking oil at IDR 11,000 per liter. But the facts on the ground, the price of cooking oil has exceeded the HET and exceeded Rp. 20,000 per liter.

Trade Minister Muhammad Lutfi said the government was pouring out 11 million liters of cooking oil to curb rising prices in the market. However, he admits that the price of cooking oil is still high at this time.

"Our cooking oil has intervened, we will pour 11 million liters at (price) Rp. 14,000 in order to achieve people's purchasing power," said Lutfi in his statement, quoted on Saturday, January 1.

Lutfi said the program of 11 million liters of cooking oil at a price of Rp. 14,000 had already been implemented. This program will start in November 2021.

Open subsidy option

Another way to deal with the high price of packaged and bulk cooking oil, the Ministry of Trade opens a subsidy option. Lutfi said he and related staff had coordinated with the Coordinating Ministry for the Economy to make it happen.

Lutfi said, this subsidy will use funds collected by the Palm Oil Plantation Fund Management Agency (BPDP KS).

"We have coordinated the Coordinating Ministry for the Economy to provide subsidies from the BPD PKS, which is in the process. Because we have tested the subsidy mechanism," he said.

For information, BPDP KS is an institution that is a non-echelon organizational unit in the field of oil palm plantation fund management which is under and responsible to the Minister of Finance through the Directorate General of Treasury.

Distribution of 11 million liters of cooking oil is only 35 percent

Coordinating Minister for the Economy Airlangga Hartarto said that the realization of the cooking oil program of IDR 14,000 per liter had only reached 35 percent of the targeted 11 million liters sold by the end of December 2021.

Airlangga said that this program was the government's effort to suppress the price of cooking oil which had recently soared. In accordance with the direction of President Joko Widodo (Jokowi).

Furthermore, Airlangga said that the government would continue to encourage the distribution of the cooking oil. Currently, the 11 million poured oil is only available in minimarkets and will be pushed into the transitional market.

"This program is part of market operations and is the direction of the President to continue," he said, at the Reflection on 2021 Achievements and 2022 Economic Outlook, Thursday, December 30, 2021.

Previously, Chairman of the Indonesian Retail Entrepreneurs Association (Aprindo) Roy Nicholas Mandey said that the simple packaged cooking oil program at low prices would be available until January 2022 at modern retailers.

"Currently it continues and we hope that the target is until the first or second week of January this program has been completed," he said in a virtual press conference, Wednesday, December 22, 2022.

Furthermore, Roy explained that the supply of simple packaged cooking oil was carried out in stages because cooking oil producers also asked for sufficient time from production to product distribution to retail stores.

"We are continuing the process. Why not directly? Because the production process itself or making simple packaging has a processing time, then there is logistics time, delivery of goods, especially in regions," he said.

Not only that, according to Roy, the supply of simple packaged cooking oil will be carried out in stages to ensure stock availability until early next year. "Because after the new year there are still some people who are resting and so on, who still need cooking oil," he said.