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Medan regulators investigate suspected cooking oil supply restriction
The Business Competition Supervisory Commission (KPPU) has launched an investigation into suspected cartel-style supply restriction after the discovery of a stockpile of more than 1 million liters of cooking oil in a warehouse Deli Serdang regency, North Sumatra.
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Apriadi Gunawan
The Jakarta Post/Medan
The Business Competition Supervisory Commission (KPPU) has launched an investigation into suspected cartel-style supply restriction after the discovery of a stockpile of more than 1 million liters of cooking oil in a warehouse Deli Serdang regency, North Sumatra.
Ridho Pamungkas, head of the KPPU’s Medan office, said the commission was suspicious of the volume of the stockpile amid an ongoing cooking oil shortage.
“We are looking into whether there are cartel practices,” Ridho told reporters in Medan on Saturday. He called on the police to investigate the matter further.
“This discovery shows the reluctance of producers to cooperate with the government to secure the supply of cooking oil for the people,” Ridho said.
The stockpile was discovered by the North Sumatra Food Task Force on Friday during an impromptu inspection of a warehouse operated by PT Salim Ivomas Pratama, a subsidiary of processed food giant PT Indofood Sukses Makmur.
The task force inspected two additional warehouses in the regency, one belonging to PT Indormarco Prismatama and the other to PT Sumber Alfaria Trijaya.
The task force members include officials from the North Sumatra Police and the North Sumatra provincial industry and trade body and economics bureau.
PT Salim Ivomas Pratama said in a statement that the cooking oil stockpile was intended to supply Indofood instant noodle factories.
“Our factory prioritized the cooking oil needs of our company group’s instant noodle factories all over Indonesia, including in Deli Serdang,” the statement read, as quoted by kompas.id on Saturday.
The company added that the volume of cooking oil found in the warehouse would usually be delivered within two to three days and that it would supply instant noodle factories in Sumatra.
North Sumatra Police director for special crimes, Sr. Comr. John Charles Edison Nababan, said the police would summon the company representatives for clarification on Monday.
“If we find any indication of legal violation, we will, of course, process it,” John Charles said on Saturday.
The government is working to provide subsidized cooking oil at Rp 14,000 (97 US cents) per liter in the first half of the year amid a hike in market prices of the staple good.
It has set aside Rp 3.6 trillion to finance the program, which aims to provide 1.2 billion liters of subsidized cooking oil by partnering with some 70 producers.
In January, the government mandated that a portion of all domestically produced crude palm oil (CPO) be sold at Rp 9,300 per kilogram and that a portion of domestically produced olein be sold for 10,300 rupiah per kg.
The requirement came in response to an approximately 40 percent year-on-year increase in cooking oil prices, in line with high global CPO prices.
A domestic market obligation (DMO) applies to all Indonesian cooking oil producers, which must sell 20 percent of their planned exports to the domestic market. The Trade Ministry has estimated that the national demand for cooking oil will be 5.7 million kiloliters in 2022.
