JAKARTA - The Ministry of Trade (Kemendag) will start operating the subsidized simple packaged cooking oil market starting this week. The cooking oil will be priced at Rp14,000 per liter. The subsidized cooking oil supply will be channeled to traditional markets and modern retailers.

Trade Minister Muhammad Lutfi said there were no priority areas for distribution. This means that all regions in Indonesia will get the same supply. This step is a form of government intervention in suppressing rising cooking oil prices.

"We will start this week, definitely this week. The areas are all over Indonesia, at least in the 216 markets monitored by the Ministry of Trade," he said when met in Jakarta, Wednesday, January 12.

For information, the government will subsidize 1.2 billion liters of cooking oil for the next six months. The subsidized cooking oil will be sold for Rp14,000 per liter. The total funds used to subsidize as much as Rp3.6 trillion, which come from palm oil export levy funds at the Palm Oil Plantation Fund Management Agency (BPDPKS).

"The mechanism uses the BPDPKS mechanism, approximately we will subsidize around Rp3,000. We are preparing for 1.2 billion liters for the first six months of 2022. I guarantee the price will be at Rp14,000," he said.

Lutfi said accountability in the distribution of subsidized cooking oil needs to be ensured because of the large budget and volume. Furthermore, Lutfi said that his party also anticipates the potential practice of collecting subsidized cooking oil for export.

"Because this is a big job, we must work together and be accountable. We don't want the simple packaging suddenly, cut, collected, then exported again. We want this for the Indonesian people," he explained.

Furthermore, Lutfi said that the distribution of cheap cooking oil would not only involve state-owned enterprises, but also private companies. At least, there are 70 cooking oil producers involved and about 200 packers.

Including the distribution of subsidized cooking oil, the private sector will be involved. But unfortunately, the Ministry of Trade has not yet produced any manufacturers or brands that will provide cheap cooking oil at a price of Rp14,000.

Lutfi also said that this year, Indonesia might again face the phenomenon of high crude palm oil (CPO) prices which impact on the high price of cooking oil.

As is known, the price of CPO reached 1,340 US dollars per metric ton (MT) or higher than the previous normal price which was around 600 to 800 US dollars per MT.

"Our exports in 2021 should reach 27 billion US dollars, the highest in history. The price per ton is 1,340 US dollars. What is the effect? Oil prices are rising. Now we are intervening so that the price of cooking oil remains available and affordable, which is our goal is the price of goods available and affordable at Rp14,000," he explained.


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