TEMPO.CO, Jakarta - In a press conference on Sunday, Coordinating Minister of Maritime Affairs and Investments Luhut Pandjaitan suspects a cooking oil distributor is responsible for a monopoly of the commodity’s supplies in the West Javan market, one of the most populated regions in the Java Island.

He believes this is proven by the relatively high prices of cooking oil despite sufficient supplies in the province to meet public demand.

“[Cooking oil] distribution is enough but prices in the market are still relatively high. After we mobilized a team to the field, we uncovered indications of market monopoly,” said the Minister who the President appointed to specifically handle the issue.

Despite sufficient distribution in the region, he claims the region’s second distributor is owned by a single individual, a situation he argues is vulnerable to price manipulation. Luhut revealed that the government had gradually started to crack down on the distributor.

The government had introduced a domestic market obligation (DMO) policy to guarantee local supplies of cooking oil, which he said not only targets the commodity’s producers but also down to the level of distributors.

Indonesia recently imposed a 300,000 ton cooking oil DMO - which is 50 percent above domestic demand - to flood the local market with the commodity that is hoped to drop prices of bulk cooking oil to the country’s upper ceiling price of Rp14,000 for each liter. Luhut Pandjaitan added that palm oil businesses that adhere to the DMO policy can export the commodity quicker than those that fault to comply with the regulation.

RIANI SANUSI PUTRI

Click here to get the latest news updates from Tempo in Google News