Executive Director of the Center of Economics and Law Studies (CELIOS) Bhima Yudhistira criticized the government’s policy of only subsidizing bulk cooking oil with Highest Retail Price (IT) Rp14 ribu.
He estimates that the policy could have fatal consequences, especially for packaged cooking oil. The reason is that the price of packaged cooking oil will soar if it is submitted to the market mechanism.
“Releasing the price of packaged cooking oil to the market mechanism is a fatal policy. Because the middle class who will suffer is the middle class, whose purchasing power is not yet solid, and has not returned to pre-pandemic levels,” said Bhima to CNNIndonesia.comWednesday (16/3).
Moreover, he added, in the near future people will enter Ramadan. Bhima is worried that because of the policy, the price of packaged cooking oil will rise by 20 to 40 percent.
“If you release (price) of packaged cooking oil with a market mechanism, the price will be even higher, especially during Ramadan. Usually the price during Ramadan goes up by 20 percent compared to normal months because of demand for cooking oil. And at the peak of Eid, the increase can be 40 percent compared to with an ordinary month,” he explained.
He reminded the government about several problems that might occur from the latest cooking oil HET policy. Firsta shift in purchasing on the part of consumers who will prefer subsidized bulk cooking oil to packaging for reasons that are more expensive.
Secondthe wrong target for the distribution of subsidies because it is very difficult to supervise the circulation of bulk cooking oil.
“Because what is called bulk cooking oil, there is no barcode, there is no production agency. So there is a possibility that it will be mixed with used cooking oil. It is possible that the target is not fixed, the price is still expensive at the retail level,” he said.
Third, he sees that the government is inconsistent in solving the cooking oil problem, which is actually more focused on distribution. Because according to him, if the domestic market obligation (DMO) is met, then the problem lies with the distributor.
“(The government can) take strict action against hoarding, where the traffic jam is at the distributor, it’s easier to trace if the cooking oil is packaged. So if the DMO and HET were implemented properly, it could have been resolved,” he said.
(tdh / agt)
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