What, raise the CPO export levy? Is this not robbing the
people of their rights?

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Anthony Budiawan
Anthony Budiawan, managing director of PEPS (Political Economy and Policy Studies)

Jakarta, IO – Crude palm oil (CPO) prices have skyrocketed, and this is mirrored in soaring edible cooking oil prices in the marketplace. The maximum retail price (MRP) for simple packaging cooking oil had previously been set at Rp. 11,000 per liter. However, the price determinedly climbed, nudging Rp 20,000 per liter by mid-January 2022. 

A pandemonium. The Trade Ministry was compelled to adjust the MRP to re-stabilize the prices. The ceiling prices per liter were then set at Rp. 11,500 for bulk cooking oil, Rp. 13,500 for plain packaging cooking oil and Rp 14,000 for premium packaging cooking oil, as stated in the Trade Minister Regulation No. 6/2022 dated Jan. 26, 2022. 

Read: BPKN urges Jokowi to restore cooking oil prices in the market

The Trade Ministry also strengthened the CPO trade administration in the country by issuing Trade Minister Decree No. 129/2022 on the distribution of domestic demands (Domestic Market Obligation or DMO and Domestic Price Obligation or DPO) on Feb. 10, 2022. 

The DMO was established at 20% of total exports, and DPO was set at Rp. 9,300 per kilogram. In other words, CPO exporters were obliged to sell 20% of their CPO exports for the domestic market at Rp. 9,300 per kilogram. This setting was created to provide people with cooking oil at more affordable prices. On a side note, the DPO is not subsidized by the Government.