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View all search resultsGovt launches cash transfer scheme for cooking oil
The scheme will provide Rp 300,000 for 23 million beneficiaries.
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T
he government has launched an unconditional cash transfer (BLT) scheme for cooking oil to help lower-income Indonesian homes purchase the staple product, which has become more expensive this year.
President Joko "Jokowi" Widodo has ordered the Finance Ministry, Social Affairs Ministry, the police and the Indonesian Military (TNI) to distribute the funds quickly as the country enters the Ramadan fasting month, when food prices usually rise due to higher seasonal demand.
“The BLT for cooking oil will be secured and disbursed immediately especially during the Ramadan fasting month to maintain people's purchasing power,” the Finance Ministry's Fiscal Policy Agency (BKF) head Febrio Nathan Kacaribu said in an online discussion on Monday.
According to the scheme, the government will provide Rp 100,000 (US$6.96) per month for three months to 20.5 million homes, including those registered with the government-funded social assistance Family Hope Program (PKH) and non-cash food assistance program (BPNT). The full funding will be disbursed in advance in April.
Febrio said the program would cost Rp 6.9 trillion in total, comprising Rp 6.15 trillion for low-income families and Rp 0.75 trillion for 2.5 million small street vendors who use cooking oil for their daily operations.
Read also: Cooking oil crisis leads to record inflation in March
Cooking oil prices soared in March after the government revoked a price cap for simple and premium packaged cooking oil in response to surging international crude palm oil (CPO) prices.
Packaged cooking oil prices went up 6 percent month-on-month to Rp 19,700 per liter in March, according to Statistics Indonesia (BPS). The agency expects the upward trend to continue in the following months. But bulk cooking oil prices fell last month because the government retained subsidies for the product.
“The [BLT for cooking oil] distribution to families will be carried out by the Social Affairs Ministry, while distribution to street vendors will be carried out by the police and TNI,” said Febrio.
Read also: Inflation eases in February as cooking oil price cools
Andrian Bagus Santoso, an economist at state-owned lender Bank Mandiri, said the BLT policy was appropriate and relatively easier to implement compared with the subsidy policy or controlling cooking oil prices given that a price ceiling was likely to be a disincentive for producers and lead to speculative practices, as happened during the January-February period.
“The [policy] will not harm the government’s budget as long as it is only temporary,” he told The Jakarta Post on Monday.
