The Cooking Oil Price Subsidy Will Be Revoked as of February 1, 2022.


The Ministry of Trade has set a price limit for cooking oil raw materials to make it affordable for producers. This policy is also supported by the obligation to supply raw materials to the country from the export of cooking oil raw materials to foreign countries.

This policy was just conveyed by the Minister of Trade Muhammad Lutfi in response to the relatively high price of cooking oil. Previously, he also set one price of cooking oil at Rp. 14,000 in modern retail stores last week.

After some time and evaluating the policy, the Minister of Trade Lutfi reissued the Domestic Market Obligation (DMO) policy of 20 percent for exporters of cooking oil raw materials. Also, Domestic Price Bonds (DPO) for the price of domestic cooking oil raw materials.

In last week’s policy, through Minister of Trade Regulation No. 01/2022 and Minister of Trade 03/2022, the government disbursed a subsidy of Rp. 7.6 trillion from the Fund Management Agency for Palm Oil Plantations (BPDPKS) to stabilize prices. In the scheme, the price difference will be paid to the cooking oil producer as a substitute for the difference in the economic price.

The Directorate General of Domestic Trade at the Ministry of Trade, Oke Nurwan, in a press statement, Thursday (27/1/2022), explained, “Through Permendag 01 and 03, where there is a use of the BPDPKS budget, this will still apply, but only for the period 4-18 January 2022 and January 19-31 2022,”

He added that because the price of CPO (Crude Palm Oil) has been determined and the raw material has been lowered (price) through the DPO, starting February 1, 2022i the payment of the price difference from the economic price to the HET price is no longer required. So, BPDPKS no longer needs to prepare the budget

According to circulating data, funds of Rp 7.6 trillion from BPDPKS were used for six months of efforts to stabilize cooking oil prices in the market with the previously mentioned scheme.

On the other hand, regarding the claim of cooking oil producers to the payment of the difference in economic funds, he said it could still be done after January 31, 2022. However, this will only be given for the distribution of cooking oil until January 31, 2022.

Lutfi added, “As long as the cut of bit distribution is until January 31, the claim period can be that long even though it is past February, so you can still claim.”

“This means that it is not limited to January 31, but the distribution on January 31 is what counts, which can be claimed to BPDPKS,” he added.