The Drama Of One Cooking Oil Price Policy, Could Create Rare Stocks Because Producers Choose Exports

Illustration. (Doc. Between)

JAKARTA - The Director General of Domestic Trade at the Ministry of Trade, Oke Nurwan, admits that the policy for cooking oil at a price of Rp. 14,000 per liter is not optimal. This is because the policy actually creates a shortage of supply in the market.

The Ministry of Trade, continued Oke, sniffed out the supply leak because producers prioritized the export market after the one-price cooking oil policy was set on January 19. The government immediately evaluates the one-price policy even though it has only been going on for two weeks.

As is known, the price policy using the subsidy mechanism of the Oil Palm Plantation Fund Management Agency or BPDPKS was originally set to last for the next six months.

"The reality is that it is not optimal either. That's why we played again, there are indications of leakage in exports," said Oke in a virtual discussion, Thursday, February 3.

Therefore, said Oke, on January 26, the Ministry of Trade took steps by issuing a Domestic Market Obligation (DMO) policy, Domestic Price Obligation (DPO). With the enactment of the DMO and DPO, exporters have the obligation to cook cooking oil into the country by 20 percent of the total export volume of each company.

"Yes, we have implemented DMO and DPO. This means that we supply it to the country first," he said.

Then, along with the implementation of DMO and DPO, the government also stipulates a regulation on the Highest Retail Price (HET) for cooking oil to ensure the availability of oil at an affordable price.

Oke said that the DMO and DPO policies could not be felt significantly in a short time.

"Until now, how come it is rare (stock), what is this? Is it an element of resistance or readiness. Indeed, this is not a decision, now it can be carried out one day immediately like turning the palm of the hand," he said.

Cooking oil rise anomaly

Oke continued, the current increase in cooking oil prices is an anomaly, due to the COVID-19 pandemic and due to the disruption of the supply of vegetable oil in the world. Even so, he acknowledged that something was not right about the policy that was too loose to trade mechanisms related to cooking oil.

"The government looks at the current position, something is not right. We admit that our cooking oil has a system in our policy that is too detached from the trade mechanism, the government's intervention in which the domestic cooking oil price is left dependent on international CPO prices," said OK.

Okay, explaining the source of the problem that must be fixed related to the skyrocketing cooking oil price, not fixing the system from upstream to downstream which has been fine for a long time. However, by breaking away from dependence on international CPO prices.

"The main reason that must be corrected is to free domestic cooking oil from dependence on international CPO prices. That is the most important thing," he said.

In addition, Oke also stressed that the government cannot wait to suppress high cooking oil prices, if it has to fix the system from upstream to downstream or even findings regarding the alleged cartel in the cooking oil industry.

"I can't wait to clean up first from upstream to downstream because women can't wait. I can't blame the cartel, because the case must go to the realm of law, there must be a court decision and so on, you can't want it tomorrow," he said.