Traders Upset about Single Price Policy

It is necessary for the government to be careful in the implementation of the single price policy of Rp 14,000 (US$1) per liter in traditional markets

Kompas/Priyombodo (PRI)

Residents carry two liters of cooking oil that they bought during the operation of the cooking oil market in Johar Baru District, Central Jakarta, Monday (17/1/2022). Each citizen has the right to buy two liters of cooking oil at a price of Rp. 14,000 per liter.

JAKARTA, KOMPAS — The government’s recent decision to implement a single consumer price ceiling for the sale of all types of cooking oil has caused a number of problems. For example, traders in traditional markets who still have old stock have been unable to compete with modern retail outlets. It is, therefore, necessary for the government to be careful in the implementation of the single price policy of Rp 14,000 (US$1) per liter in traditional markets.

The chairman of the Association of Indonesian Traditional Market Traders (Ikappi), Abdullah Mansuri, said the implementation of the single price policy was good for the general public because the people would be able to buy cooking oil at affordable prices. He complained, however, that the government had not involved traditional market traders in preparations for the single price policy.

He said traders in traditional markets had not been given sufficient notice about the single price policy. The policy is to be implemented in traditional markets starting on 24 Jan. At present, the Rp 14,000 per liter cap is only in place in modern retail outlets.

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"It is impossible for [traders in traditional markets] to sell bulk or packaged cooking oil at Rp 14,000 per liter because they have bought from distributors at higher prices," he said when contacted in Jakarta on Thursday. (20/1/2022).

Currently, traders in traditional markets sell cooking oil, both in bulk and packaged forms at between Rp 18,000 and Rp 20,000 per liter. The traders have suffered a sharp decline in cooking oil sales over the last two days following the implementation of the single price policy in modern retail outlets.

Ikappi said the government should ensure that the implementation of the single price policy would not harm traditional traders. He said there should be a mechanism to determine the role of suppliers and distribution costs so that the traders would still profit when selling cooking oil at Rp 14,000 per liter. “The suppliers and the prices that each trader gets are different. Traders' profits also need to be considered," he said.

Lia, 45, the owner of a staple food stall in Setu district, South Tangerang, Banten, had a similar problem. She was still hold old stock of packaged cooking oil that she had bought from a supplier at Rp 20,000 to Rp 21,000 per liter. She offered the cooking oil to buyers at Rp 22,000 per liter. The sales of her cooking oil had also dropped significantly over the last two days as people opted to buy from modern retail outlets.

Trade Ministry Regulation No. 3/2022 on the sale of packaged cooking oil for the public need provides for the cooking oil subsidy to be funded by the Oil Palm Estate Fund (BPDP-KS). The cooking oil subsidy, rolled out on 19 Jan., will be available for six months.

In the beginning, the single price policy will only be implemented in modern retail outlets run by members of the association of the Indonesian retailers (Aprindo). Meanwhile, the policy will be implemented in traditional markets on 24 Jan.

The amount of subsidized cooking oil that will be disbursed is expected to reach 1.5 billion liters during the six-month period. Additional funds of about Rp 7.5 trillion to subsidize distribution costs for remote areas will be taken from part of the palm oil export revenues managed by BPDP-KS.

HENDRA A SETYAWAN

Hundreds of people queue to buy cooking oil during a cooking oil market operation at the Pamulang District office, South Tangerang, Banten, Tuesday (11/1/2022). A total of 4,000 liters of cooking oil which is sold at Rp. 14,000 per liter are prepared for this market operation.

Purchasing restrictions

The chairman of Aprindo, Roy N Mandey, said the single price policy had been implemented in all modern retail outlets owned by the association’s members since 19 Jan.

He said the retail outlets had used old stock while waiting for additional supplies from producers and distributors who had been assigned by the government to distribute the subsidized cooking oil. "In order to ensure the people have the same access to the subsidized cooking oil, we limit the purchase to a maximum of 2 liters of cooking oil for each buyer," said Roy.

Roy urged people not to buy cooking oil in excess. He said people didn’t have to worry about the availability of cooking oil in modern retail outlets and stores despite the implementation of the single price policy.

Meanwhile, East Java Governor Khofifah Indar Parawansa made a similar appeal. "Don't panic and try to buy as much as possible. The government guarantees the availability of cooking oil at affordable prices," she said.

In Lampung, the local government has prepared 6 million liters of cooking oil to be distributed to minimarkets, supermarkets and traditional markets. The head of the Lampung Industry and Trade Office, Elvira Umihanni, said she had ensured that cooking oil supplies in Lampung were enough to meet the public need.

This article was translated by Hendarsyah Tarmizi.