JAKARTA - The Business Competition Supervisory Commission (KPPU) has advised the Indonesian Ministry of Trade to adjust the highest retail price (HET) for bulk cooking oil in the range of Rp. 12,000 per liter.
Meanwhile, premium packaging is at Rp. 17,000 per liter.
This suggestion was conveyed by KPPU through a letter of recommendation and consideration No.110/K/S/VIII/2022 regarding suggestions and considerations regarding the Price of Cooking Oil, which was submitted by the Chairman of the KPPU to the Minister of Trade of the Republic of Indonesia on August 4, 2022.
Deputy for the Study and Advocacy of the KPPU, Taufik Ariyanto, said that the price adjustment could be made because the price of crude palm oil (CPO) had decreased compared to July 2021, and referred to the CPO price and the ratio between the price of fresh fruit bunches (FFB) and cooking oil in the period June to July 2021.
For information, KPPU since last year has been actively supervising and is currently enforcing the law on alleged violations of laws in the cooking oil sector.
During the surveillance process, the KPPU found that when referring to data on the price movement of TBS-CPO-CPO cooking oil until August 2022, fluctuations in CPO (international and domestic) prices were relatively stable near the price movement for the July 2021 period.
"However, until now the data show that the price of cooking oil has not shown a substantial decline, both premium packaging and simple packaging (curah)," he said in an official statement, quoted Friday, September 9.
Furthermore, Taufik said that the big price difference between CPO and cooking oil can be analyzed through the ratio of premium and simple packaged cooking CPO-Kompanical prices.
From June to August 2022, the average CPO price at PT Karisma Pemeraran Bersama Nusantara (KPBN) as a reference price for cooking oil producers, recorded an average CPO price of IDR 9,900 per kilogram, with a CPO price ratio to premium packaged cooking oil prices reaching 2.4 to 3 times.
Meanwhile, the CPO price ratio with the price of simple packaged cooking oil reached 1.6 times to 1.9 times.
In the first semester of 2021, the price range of CPO is relatively the same as the June-August 2022 period.
Meanwhile, in 2021, the ratio of CPO prices to premium packaged cooking oil will only be 1.5 to 1.7 times and the CPO price ratio to simple packaged cooking oil prices is 1.3 times to 1.5 times, lower when compared to 2022.
"This shows that the margin of cooking oil business actors can still be categorized high. Based on ratios, the increase in cooking oil prices is not directly proportional to the price of TBS," he explained.
According to Taufik, the widening ratio of FFB cooking oil shows that oil palm farmers do not enjoy rising CPO prices and cooking oil.
With the current price of TBS, the price of cooking oil should be lower, or with the current price of cooking oil, the price of TBS should have increased.
Furthermore, said Taufik, currently the average price of cooking oil in June-August is IDR 17,350 per liter. This price should have reached IDR 2,500 per kg.
"By taking into account the ratio of the cooking oil CPO price, the KPPU argues that the reference price for the HET for simple packaged cooking oil (curah) can be lowered to around Rp. 12,000 per liter," he said.
Even so, KPPU hopes that the decline in HET for simple cooking oil (curah) is expected not to have an impact on reducing TBS prices in farmers.
However, Taufik believes the decline will have a positive impact on curbing inflation, especially against volatile food after the policy of increasing fuel prices.
"The price reduction will also benefit the public using simple packaged cooking oil (curah) which must face a general price increase at this time," he explained.
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