JAKARTA — Trade Minister Muhammad Lutfi has revoked the policy on domestic market obligation (DMO) and domestic price obligation (DPO) for crude palm oil (CPO) after the retail price ceiling of the palm cooking oil is no longer effective.
Minister Lutfi said that the export policy will be replaced with the intensification of export tax and export duty (PE and BK). “We’ll raise the export duty of CPO by 80% from US$375 per ton to US$675 per ton,” he said when inspecting the availability of staple foods in Pasar Senen, Central Jakarta on Thursday, 17 March 2022.
Based on the CPO export benchmark price by March 2022 at US$1,432.24 per ton, exporters will be charged at the maximum of US$200 per ton for BK and US$175 per ton for PE.
“We’ll issue a regulation today to revoke the DMO policy. It will be effective within the next five days. The DMO will be replaced with the mechanism of tax,” said Lutfi.
According to him, the increase of PE and BK of CPO will be used to finance the subsidy given by the government for bulk cooking oil, which is set at the retail price ceiling of Rp14,000 per liter or Rp15,500 per kilogram.
“It means the DPO is no longer applied as all will rely on the market mechanism and implemented through the subsidy provided by BPDPKS (the oil palm plantation fund management board). So, its price disparity should not be too high and the goods are available in the modern retail,” he said.
He said that with the new policy, the government hopes the cooking oil supply will return to normal condition, after the revocation of the retail price ceiling amid the surging price of CPO at the global market.
He admitted that the disruption of cooking oil supply to the general public was due to the too high disparity of prices between the domestic and global markets after the retail price ceiling was applied since February 2022.
The National Foods Agency (Bapanas) Head Arief Prasetyo said the retail price ceiling for packaged and bulk cooking oil had been revoked by the government. As a result, the price of cooking oil will depend on the price of CPO at global market.
“Very likely, supermarkets today will get new price from all producers. The new price will be possibly at around Rp23,000 and Rp24.000 per liter, and no longer at Rp14,000,” Arief told Bisnis on Wednesday, 16 March 2022. (*)
Source: Bisnis.com | Featured image via rocketcdn.me
