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Govt to double down on cooking oil prices, raise DMO for CPO
During a market visit, the trade minister vowed to strictly enforce a cooking oil price cap and raise the domestic market obligation for crude palm oil producers.
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A woman carries a bag of produce at a market in Bekasi, West Java, on Aug. 11, 2021. (AFP/Rezas )
T
he government has announced it will strengthen enforcement of the price ceiling on cooking oil after finding that the staple commodity was being sold above the cap in many places.
During a visit to the Kebayoran Lama Market in South Jakarta on Wednesday, Trade Minister Muhammad Lutfi said no seller there was complying with the price ceiling. Instead, they had raised prices to make gains, he alleged, in a practice that was common at traditional markets.
Breaches of the price ceiling occurred in part as a result of speculation among sellers about a plan by the government to scrap the price cap, according to Lutfi. Apparently seeking to dispel such speculation, the minister said the price cap would remain in place for no less than a year.
“We are still waiting for prices to come down, and I will involve law enforcement officers to make sure the price ceiling applies at both [supermarkets] and traditional markets,” Lutfi told reporters at the market.
Cooking oil prices surged in the months ahead of the introduction of the price ceiling as prices of crude palm oil (CPO), of which Indonesia is a leading producer and exporter, rose on the back of rising demand as the global economy recovered from the COVID-19 pandemic.
The price of bulk cooking oil sold at traditional markets in Jakarta, for example, reached Rp 18,300 (US$1.27) per liter in late January, Trade Ministry data show. While it fell to Rp 15,850 per liter on March 8, it remains far above the cap.
The government set the price cap at Rp 11,500 per liter for bulk cooking oil, Rp 13,500 for cooking oil with simple packaging and Rp 14,000 per liter for cooking oil sold in premium packaging.
