Government Needs to Consider Direct Subsidy for Cooking Oil

The price of cooking oil that has soared since the end of 2021 is still continuing until now. Various policies, namely the domestic market obligation (DMO)

and domestic price obligation (DPO) policies to setting the highest retail price (HET) for cooking oil, have proven to be ineffective in reducing price increases and the scarcity of migrants in the market. Therefore, the government is advised to consider direct subsidies to people or direct beneficiaries. The government has issued the Minister of Trade Regulation (Permendag) No. 6/2022 concerning the Determination of the Highest Retail Price (HET) for Cooking Oil on January 26, 2022, and is effective February 1, 2022. In the Minister of Trade Regulation No. 6/2022, the HET for cooking oil is regulated with details of bulk migration Rp. 11,500/liter, simple packaging of Rp. 13,500/liter, and premium packaging of Rp. 14,000/liter. This HET policy came into effect on February 1, 2022 and at the same time revoked the Minister of Trade Regulation No. 3/2022 regarding the one-price migration policy of Rp. 14,000/liter on January 19, 2022. Through the DMO regulation issued by the Ministry of Trade, producers exporting CPO are required to supply 20% of their export quota for domestic needs. Meanwhile, the DPO regulation applies the domestic selling price of CPO at Rp 9,300 per kilogram and Rp 10,300 per liter for olein. The DMO and DPO regulations take effect on January 27, 2022. Executive Director of the Institute for Development of Economics and Finance (Indef) Tauhid Ahmad said that currently the problem was in traditional markets, both in terms of supply and prices for migrants, which were still above the HET.

|•SOURCE•| Articles : KOMPAS | Image :SETKAB |

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