Indonesian Government Revises Bulk Palm Cooking Oil Policy

JAKARTADAILY.ID – The government completely overhauled policies related to Bulk Cooking Palm Oil (MGS), from trade-based to industrial-based policies. The trade-based MGS Bulk policy has proven to be ineffective in maintaining the supply and price of MGS for the community, micro-enterprises, and small businesses.

"With industry-based policies, the government can better regulate the raw materials, production, and distribution of Bulk MGS, so that the supply is always available at a price that matches the Highest Retail Price (HET)," said Industry Minister Agus Gumiwang Kartasasmita in Jakarta, Tuesday, March 22.

This Industry-Based MGS Policy is stipulated through the Regulation of the Minister of Industry (Permenperin) No. 8 of 2022 concerning the Provision of Bulk Cooking Oil for the Needs of the Community, Micro Enterprises, and Small Businesses in the Financing Framework by the Palm Oil Plantation Fund Management Agency (BPDPKS).

This Permenperin regulates the business processes of the Subsidized Bulk MGS program starting from registration, production, distribution, payment of subsidy claims, prohibitions, and supervision.

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At the registration stage, all Palm Cooking Oil industrial companies are required to register to participate in the program. There are 81 industrial companies that are required to follow and participate in this program.

"We require all MGS industries to register through SIINas and industrial companies that do not register will be subject to sanctions," said Minister of Industry Agus.

The registration process is carried out through the Ministry of Industry's National Industrial Information System (SIINas). The industry is required to submit data and documents regarding the source and volume of raw materials, a list of distributors (D1 and D2) to the district/city level.

"All data and documents are verified by the Ministry of Industry to get a registration number no later than three working days. Then, industrial companies sign a financing agreement for the supply of Bulk Cooking Oil with the President Director of BPDPKS no later than five days after that," explained the Minister of Industry.

Furthermore, the Ministry of Industry will determine the allocation of production and distribution of areas for each Bulk Cooking Palm Oil producer. Industries that have produced and distributed their products can submit claims to BPDPKS.

This claim is submitted through SIINas to be verified by the Ministry of Industry. After that, BPDPKS transfers the subsidy funds to the producer's account according to the verified claim evidence.

"We are trying to make the payment of subsidy claims from BPDPKS to the industry as short as possible digitally and with great attention to good governance," explained the Minister of Industry.

Strict Supervision Using Digital Applications

In order to prevent seepage or leakage in this program, regulations are stipulated prohibiting business actors, such as MGS producers and distributors, from repacking, selling to industry, and exporting abroad.