Pour 1.2 Billion Liters Of Cheap Cooking Oil For 6 Months, How Much Funds Does The Government Spend?

A trader shows his packaged cooking oil at the Malacca Market, Rorotan, Jakarta. (Photo: M Risyal Hidayat/Antara)

JAKARTA - The government continues to make various efforts to stabilize cooking oil prices, which have recently soared. One of them is that the government provides 1.2 billion liters of cooking oil at low prices. The prepared budget has reached Rp. 3.6 trillion.

Coordinating Minister for the Economy Airlangga Hartarto said that as an effort to stabilize prices, the government provided cooking oil at a price of Rp. 14,000 per liter for the public throughout Indonesia.

"This cooking oil supply is prepared for the next 6 months and will be evaluated in May and this can be extended," he said, in a virtual press conference, Wednesday, January 5.

Airlangga said the volume of cooking oil provided by the government was 1.2 billion liters for six months. For that, Airlangga said that a budget of Rp. 3.6 trillion was needed to cover the difference in prices and value added tax (VAT).

Furthermore, Airlangga said the provision and payment of the budget needs for the six months would be carried out by the Palm Oil Plantation Fund Management Agency (BPDPKS).

For information, BPDPKS 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.

"This includes paying VAT, preparing a cooperation agreement (with oil palm plantations) and establishing an independent surveyor," he explained.

Then the Minister of Finance Sri Mulyani was assigned to prepare procedures for collecting and depositing VAT on this price difference by adopting the regulations of the Director General of Taxes.

"And other institutions provide support including the Ministry of Industry related to SNI," he said.

Regarding regulation, the Minister of Trade is tasked with preparing policies and regulations for the highest retail price (HET) for cooking oil. According to the regulation issued by the Ministry of Trade, the HET for simple packaged cooking oil is Rp. 11,000 per liter, while in the current market the price of cooking oil far exceeds the HET of Rp. 18,000 per liter.

At the same time, market operations that distribute 11 million liters of cooking oil for Rp. 14,000 remain in 47,000 modern market outlets. This program has been running since November 2021.

The Minister of Trade (Mendag) Muhammad Lutfi said that the cheap cooking oil that had been distributed had reached 4 million liters, so that there were still 7 million left that had to be disbursed immediately.

"So 7 million liters are still on going. This afternoon we have a meeting for plain ups," he said.

Lutfi hopes that the distribution of 1.2 billion liters of cooking oil over the next six months will increase people's access to cheap cooking oil.

"Hopefully it can provide added value to the community and safe value to the community because this form of distribution of cooking oil is simple packaged cooking oil," he said.

For the distribution of 1.2 billion liters of cooking oil, said Lutfi, his party will involve 70 cooking oil industries and 225 packaging companies. In the early stages, the government will cooperate with five companies first.

Furthermore, Lutfi targets the distribution of the cooking oil to be able to reach all markets monitored by the Ministry of Trade by the end of next week.

"For the first stage, we will ask the five big (industry) first to immediately allocate for simple packaged cooking oil so that it can run. Hopefully by the end of this week (production) has started," he said.