Here’s How Malaysia’s Neighboring States Overcome the Problem of Cooking Oil Page all

KOMPAS.com – Although the Indonesian government has rolled out a number of programs, the polemic cooking oil has not subsided yet. In some areas, cooking oil is even scarce.

In minimarkets, the shelves that usually contain cooking oil are almost always empty. For the same amount of money, in traditional market traders and in stalls around residential areas, cheap cooking oil is also very difficult to find. Even if it is available, the price is still in the range of Rp. 20,000 per liter.

Not infrequently, in various market operations carried out by a combination of various government agencies, it is common to see residents fighting with each other or waiting in long lines for hours to get their share of two liters of cooking oil.

The increase in cooking oil prices is not only happening in Indonesia. neighbor country Malaysia which is also the world’s largest palm oil producer, is also facing similar problems at home.

Also read: War in Indonesia: Deployment of the TNI when Residents Scramble for Cooking Oil

So how does the Malaysian government deal with rising cooking oil prices?

The Malaysian government through the Ministry of Domestic Trade and Halehwal Users (KPDNHEP), sets the price of cooking oil, as cooking oil in Malaysia, for simple packaging is RM 2.5 or equivalent to Rp 8,500 per kilogram.

In contrast to producers in Indonesia who sell oil in per liter packages, cooking oil in Malaysia is sold in kilograms. For your information, 1 kilogram of cooking oil is equivalent to 0.8 liters.

That price is the price of cooking oil subsidized by the government with simple plastic packaging in the program Cooking Oil Stabilization Scheme (COSS).

Even though it only uses simple packaging, the Malaysian government guarantees the quality of subsidized palm cooking oil sold in polybags is the same as that sold in bottles.

Also read: Why do Malaysian companies control so many oil palm plantations in Indonesia?

According to him, cooking oil sold in bottles and plastic cans is not subsidized and the price is determined by the price of CPO on the world market.

Malaysians are free to choose to buy subsidized cooking oil in polybags or non-subsidized packaging in bottles and plastic cans.

Quoted from The Star, KPDNHEP consistently orders suppliers and producer companies to implement COSS programs throughout Malaysia, both Peninsular and Sabah and Sarawak.

The orders are clear, producers and distributors are asked to speed up the packaging and distribution of subsidized goods so that there is no shortage in the market. This is done so that the supply of cooking oil does not experience a shortage.

Also read: Forests Are Cleared for Palm Oil, But Cooking Oil Is Rare and Expensive

KPDNHEP’s Director of Enforcement, Azman Adam, said that there were still shortcomings that needed to be fixed in the program. Therefore, the government has approved the production of 60,000 tons of subsidized cooking oil per month to ease the burden on consumers.

“However, due to several factors, such as panic buying, supply disruptions occurred in the market. This is exacerbated by the spread of false news about the increase in the price of goods,” he said.

According to Azman, apart from panic buying, the full opening of the economic sector during the holiday also contributed to a shortage of supplies in the market.

Meanwhile, he reminded traders not to impose certain conditions on the purchase of subsidized cooking oil because it is against the law.

Also read: Is it true that the claim of the Minister of Trade for Indonesian Cooking Oil is Cheaper than Malaysia?

“Consumers who are aware of this practice are encouraged to submit an official complaint to the ministry so that firm action can be taken against irresponsible traders,” he said.

In addition, continued Azman, KPDNHEP enforcement officers had inspected 80,465 points of sale across the country over the course of a month. Of that amount, he said, 19 percent or 12,834 buildings are located in rural areas.

“The checks are carried out to ensure that consumers in rural areas enjoy the same prices for basic goods such as sugar, flour and cooking oil as those living in urban areas,” he said.

Meanwhile, for the price of non-subsidized cooking oil, as of December 31, 2021, KPDNHEP released the price of cooking oil at RM 27.9 or around Rp. 95,100 for a 5 kg size.

Also read: Apart from Malaysia, Singapore also controls a lot of palm oil in Indonesia

In other words, the price of cooking oil in Malaysia is Rp. 19,020 per kilogram. These prices are for some areas such as the State of Pulau Pinang.

In other states, the price of cooking oil is higher such as Perlis State which is RM 28.29 and in Kedah State it is RM 28.90 for every 5 kilogram pack.

Claims of the Minister of Trade of the Republic of Indonesia

The Minister of Trade of the Republic of Indonesia (Mendag) Muhammad Lutfi claimed that the price of cooking oil sold in Indonesia is still relatively cheaper than Malaysia.

Malaysia is Indonesia’s closest neighbor which is also the largest producer of palm oil (CPO) in the world. The two countries control around 90 percent of the global CPO trade market share.

Also read: Blusukan to Jambi, Trade Minister: Cooking Oil Available and Safe

Lutfi said, when comparing the price of subsidized cooking oil, the Malaysian government is recognized to provide cooking oil that is more affordable, namely 2.5 Malaysian ringgit (RM) per kilogram or equivalent to around Rp. 8,500 per kilogram.

Meanwhile, subsidized cooking oil in Indonesia, which is sold under government programs, is priced at Rp. 14,000 per liter. Even that stuff is hard to find in the Indonesian market.

It should be noted that in the Malaysian market, cooking oil is sold in kilograms, not liters as used by retailers in Indonesia. 1 liter of cooking oil is approximately equivalent to 0.8 kilograms of cooking oil.

For the price of non-subsidized cooking oil in Malaysia, continued Lutfi, there it is priced at around 6.7 ringgit or around Rp. 20,000 per kilogram.

“This means that it is actually more expensive than oil in Indonesia,” Lutfi claimed as quoted on Tuesday (1/2/2022).

Also read: RI is the World’s Largest Palm Oil Producer, but the Price is Regulated from Malaysia

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