CPO Still High, Oil Price Remains Expensive Until 2023? What is The Role of BPDPKS? Airlangga Promise This

JAKARTADAILY.ID - The price of crude palm oil is still in high number, a phenomenon that should be good for palm oil producers in Indonesia, but ironically it has a negative impact on the wider citizen.

The reason was the high price of CPO is suspected to cause the price of CPO derivative products to be expensive, and one of the most widely used CPO products derivatives is cooking oil.

Citing the price of CPO on the Malaysia Exchange yesterday, Tuesday, February 8, 2022, it was still closed at MYR 5,252 per ton, or only 1.78 percent down from the previous day. Why is this price high? Because if calculated the increase on a year-to-year basis, it has skyrocketed by 52.52 percent.

What is the impact on the public in Indonesia? The price of one of the CPO derivative products such as cooking oil has soared high.

According to Indonesia's Strategic Food Price Information Center (PIHPS), the average price of the branded packaged cooking oil in traditional markets is around Rp. 19,900 per kg as of February 8, 2022.

If the kilogram is converted to liters, then the price is Rp. 21,890 per liter, which makes the price still exceed by far above the government per price policy of Rp. 14,000 per liter.

As long as the price of CPO is still high, there is a dilemma because according to the market law, when the price of raw materials is high, the price of derivative products follows.

What is actually an advantage for palm oil producers, can mean making a tight pocket for cooking oil buyers, especially mothers.

How does the government's per-price policy work? This is how. To sell cooking oil at a price of Rp. 14,000 per liter, the government must provide a 'subsidy' to cooking oil producers.

There is a way so that cooking oil can be sold below the market price, for example at Rp. 14,000/liter as the government wants. That is by providing 'subsidies' to cooking oil producers.

Why not subsidize the people?

Why should it be subsidized? When cooking oil producers buy CPO at a high price, who has to bear the difference if it has to be sold at a low price?

Bhima Yudhistira Adhinegara Researcher at INDEF (Institute for Development of Economics and Finance), said: "The problem lies in the subsidy policy through oil companies as a mistake."

"As long as the subsidy is to the private sectors, indirectly to recipients or the poor, there will be a gap between supply and demand," said Bhima.