Government Mandates Bulog and ID Food to Distribute Minyakita

New Distribution Strategy for Cooking Oil

The Indonesian government has assigned Perum Bulog and ID Food to distribute 790,000 kiloliters of Minyakita, a branded cooking oil product, starting January 2026. This decision is part of a new regulation that requires state-owned enterprises (BUMN) to handle at least 35% of cooking oil distribution.

Cutting Out Distributors

The distribution will be done directly to retailers, eliminating the role of distributors in the supply chain. According to Ahmad Rizal Ramdhani, CEO of Perum Bulog, this direct distribution method aims to reduce the distribution chain and maintain the retail price at Rp 15,700 per liter. By cutting out intermediaries, the government hopes to prevent price inflation and ensure that consumers receive the product at a controlled price.

Pricing Mechanism

Bulog will purchase Minyakita from producers at Rp 13,500 per liter and sell it to retailers at Rp 14,500 per liter, making a margin of Rp 1,000 per liter. This margin will be used to cover distribution costs, including bank interest and logistics expenses, as well as to repay loans taken for procurement. Febby Novita, Bulog's Marketing Director, emphasized that the profit is not merely for business gain but to sustain the distribution operation.

Regulatory Framework

The new policy is based on the Minister of Trade Regulation (Permendag) Number 43 of 2025, which governs the distribution of packaged palm oil and the management of cooking oil supplies. The regulation mandates that BUMN Pangan (state-owned food enterprises) act as primary distributors (D1) receiving supplies directly from producers and distributing them to retailers.

Impact on Market

This policy is expected to have a significant impact on the cooking oil market in Indonesia by stabilizing prices and ensuring the availability of Minyakita at a controlled price. By directly supplying retailers, the government aims to prevent hoarding and price manipulation by distributors, thus protecting consumers from potential price hikes.