Mutia Yuantisya, Jakarta – During an official meeting with members of the House of Representatives on Thursday, March 17, 2022, Minister of Trade Muhammad Lutfi accuses "mafias" to be responsible for the country's cooking oil scarcity and skyrocketing prices.
Lutfi argued that policies the government introduced managed to force supplies to overflow the domestic market. Lutfi claimed that there are two effective policies forcing exporters to supply palm oil-based products domestically with the first by introducing Regulation No.6/2022 on the ceiling price for palm oil products and the domestic market obligation (DMO).
"CPO exporters must hand over 20 percent of the exports under a determined price based on domestic price obligation," said the Minister in front of Commission VI House of Representative (DPR) members on March 17, 2022.
He claimed that the Trade Ministry managed to gather 720,612 tons of CPO-based products in 28 days from being exported, which amounts to 20.7 percent of the commodities planned to be exported which amounts to 3,507,241 tons.
Lutfi explained that of the DMO of 720,612 tons, the Ministry of Trade managed to distribute 76.4 percent or equivalent to 551,069 tons from the 720,612 tons-worth of products under the DMO policy. "If we convert this to liters, roughly this is more than 570 million liters," said Lutfi.
But as it turns out, consumers in Indonesia found it difficult to purchase cooking oil sold below the upper cap the government had imposed. He suspects this had been caused by the mafia practices.
"This is speculation, we conclude that there are people who don't deserve to get benefit from this policy," said Lutfi who believes cooking oil supplies of up to millions of tons that should have been distributed to the public had been distributed to industries and smuggled overseas.