Jakarta –
The policy for the mandatory supply of domestic needs (Domestic Market Obligation/DMO) and price fixing (Domestic Price Obligation/DPO) for palm oil or crude palm oil (CPO) was repealed. This decision was taken after the Highest Retail Price (HET) for packaged cooking oil was no longer valid.
“Today the Minister of Trade Regulation will be issued and in 5 days it will take effect. There will be no more DMO,” said Trade Minister Muhammad Lutfi at Senen Market, Central Jakarta, Thursday (17/3/2022).
Lutfi said the two CPO export regulatory policies would be replaced by intensification of export levies and export duties for exporters. That way, entrepreneurs will be more interested in selling CPO domestically.
“The DMO was replaced with a mechanism called tax. So if the tax is big, people will sell it domestically more profitably than abroad,” he added.
The government will increase export levies and export duties on CPO commodities to US$ 675 per metric ton (MT) or an 80% increase from the previous position of US$ 375 per MT. The increase will be diverted to finance the bulk cooking oil subsidy which is set at Rp. 14,000/liter through the Palm Oil Plantation Management Agency (BPDPKS).
“With today’s price, previously export levies and export duties amounted to US$ 375 per ton, now we have added another US$ 300 per ton to US$ 675 per tonne,” explained Lutfi.
In this way, it is hoped that the supply of cooking oil will flow back smoothly to traditional markets and modern retail. This is because the HET has been revoked in the midst of soaring CPO prices in the global market.
So far, the delay in the supply of cooking oil to the community is said to be due to the too wide price disparity between domestic and international prices when the HET was enforced. “The price disparity should not be too high and the goods are in modern retail,” he said.
Watch Video: Trade Minister Lutfi Finally Attends a Meeting with the DPR to Discuss Cooking Oil
(aid/dna)
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