Jakarta, CNBC Indonesia – The government finally raised the white flag. After the Highest Retail Price (HET) policy for cooking oil did not improve the situation, the government decided to release the price of the product to the market mechanism.
“The price of packaged (cooking oil) will adjust to the economic value. We hope that with this economic (price) palm oil will be available in modern markets as well as traditional markets or wet markets,” said Coordinating Minister for the Economy Airlangga Hartarto recently.
HET IDR 14,000/liter makes cooking oil rare in the market. Understandably, the HET is far below the price of cooking oil production which rose due to the increase in the price of raw materials for crude palm oil (CPO).
In the last month, the price of CPO on Bursa Malaysia still recorded an increase of more than 8% point-to-point. Over the past year, the increase was no less than 51%.
HET created what in economics is called scarcity premium. Entrepreneurs who already buy CPO at high prices are reluctant to sell cooking oil at low prices. Stock is held so that there is a shortage. Even though the goods are available, the price soars above the HET.
Queues of residents who want to buy cooking oil occur in various areas of the Unitary State of the Republic of Indonesia. Even the queues to the point of taking lives.
–
