Reluctant To Be A Victim Of Cooking Oil Scarcity, Oil Palm Farmers Propose To Reduce The B30 Program To B20

Illustration. (Photo: Doc. Antara)

JAKARTA - The Palm Oil Farmers Union (SPKS) proposes the government to lower the target of B30 to B20, so that farmers do not become victims in overcoming the problem of cooking oil scarcity that is currently happening in the country.

As is known, the government revoked the highest retail price (HET) for packaged cooking oil and then provided subsidies to businesses that produce bulk oil. However, the source of funds for the bulk oil subsidy comes from palm oil funds by increasing the levy on palm oil funds.

Previously, through the Regulation of the Minister of Finance of the Republic of Indonesia Number 23/PMK.05/2022 concerning Service Tariffs for the Public Service Agency of the Palm Oil Plantation Fund Management Agency (BPDPKS), the government has increased the levy on palm oil funds progressively.

If the price of CPO is higher, the levies will be bigger. In the latest policy, the highest levy is if the CPO price is above US$1,500 with a levy of US$375 per tonne.

Secretary-General of SPKS, Mansuetus Darto, assessed that the change in the government's decision to increase the levy on palm oil funds was the government's repeated mistake. Because all this time, many farmers have voiced that the price of fresh fruit bunches (FFB) has been eroded due to the collection of palm oil funds.

"The problem of scarcity of cooking oil, palm oil farmers are victims," he said in an official statement, Tuesday, March 21.

Darto said that the increase in palm oil export levies was because the CPO price was the reference for determining or calculating the FFB price carried out by the plantation service in Indonesia. If the CPO levy is high, then the price of CPO which is the reference for determining the price of FFB by farmers will be low as a result, the price of FFB will also fall.

"With the latest increase in palm oil levies through PMK 23/PMK.05/2022, we estimate the reduction in FFB prices at the oil palm farmer level by around IDR 600 to IDR 700 per kg of FFB," he said.

Therefore, Darto also asked that this latest palm oil levy be canceled. If the current need for funds for B30 biodiesel subsidies is very large, then the steps that should be taken by the government are to reduce the biodiesel program target which is currently B30 to B20.

"This problem can be solved if the B30 program is reduced to B20. This is a solution to the problem of raw materials, because the raw materials are used up for the Biodiesel Program," he said.

If it is lowered to B20, said Darto, the palm oil fund will be in surplus. In addition to the raw materials that will be available because they are reduced to B20, the surplus palm funds can be used to overcome the problem of scarcity of cooking oil.

"Regarding the remaining funds in BPDPKS, the levy from 2015-2021 is around IDR 138 trillion, there is still around IDR 22 trillion. This means that for the benefit of programs related to oil palm farmers, such as the PSR program, funds are still available," he said.