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View all search resultsRI to scrap subsidy for bulk cooking oil
The subsidy was introduced in January to compensate cooking oil producers for selling below market prices.
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T
he Industry Ministry has announced it would scrap the subsidy for bulk cooking oil, effective from Tuesday, leaving many producers unable to file a subsidy claim for selling the staple food below market prices.
Introduced in January, the subsidy scheme compensated producers for selling cooking oil at Rp 14,000 (96 US cents) per liter at a time when market prices were at Rp 20,000 per liter due to high global crude palm oil (CPO) prices. The difference was covered using funds from the Palm Oil Support Fund Agency (BPDPKS).
Read also: Govt to provide cooking oil at Rp 14,000 per liter
“[Subsidizing] the bulk cooking oil price using the BPDPKS fund will end on May 31 midnight,” the Ministry’s Agroindustry Director General Putu Juli Ardika told reporters at a press briefing on Monday.
Replacing the subsidy scheme, the so-called bulk cooking oil public program (MGCR) is to take effect on June 1. The MGCR sets price caps and domestic market quotas for cooking oil ingredients such that prices fall to the government target price.
Bulk cooking oil held a lion's share of 62 percent of total domestic cooking oil demand, with small businesses and lower-income families its main consumers.
Read also: Trade Ministry issues new distribution rule for bulk cooking oil
