Indonesia Implements New Cooking Oil Distribution Strategy

State-Owned Enterprises to Play Key Role

Indonesia's Trade Minister Budi Santoso announced a significant shift in the distribution strategy for Minyakita, the country's subsidized cooking oil program. The government plans to channel 30-35% of Minyakita through state-owned enterprises (BUMN Pangan), specifically mentioning Bulog and ID Food as key players in this initiative.

Addressing Price Concerns

This policy move is primarily aimed at intervening in the current cooking oil prices, which remain above the stipulated Maximum Retail Price (HET). By leveraging state-owned enterprises, the government seeks to create a more controlled distribution mechanism that could help stabilize prices in the market.

Regulatory Framework

The new distribution strategy will be formally incorporated into a revised version of the Minister of Trade Regulation No. 18/2024. This regulatory update is expected to provide the necessary legal framework for the changed distribution dynamics, ensuring compliance and effective implementation across all stakeholders involved.

Market Implications

The decision to involve BUMN Pangan more significantly in the distribution of Minyakita represents a strategic move to enhance government control over the cooking oil market. By doing so, the government aims to achieve better price stability and ensure that the subsidized cooking oil reaches the intended beneficiaries more effectively.