Uncertainty in Cooking Oil Policy

KOMPAS/ZULKARNAINI

Buyers choose packaged cooking oil at a retail store in Banda Aceh, Aceh Province, Friday (25/3/2022). The availability of packaged cooking oil is relatively normal, but the availability of bulk cooking oil is not normal.

The problem related to cooking oil in Indonesia has been going on for more than three months, with no solution in sight. The measure announced by the government to cope with the cooking oil shortage has even caused uncertainty.

President Joko “Jokowi” Widodo has acknowledged that a number of government policies have not been effective in overcoming the scarcity of cooking oil.

For this reason, the President recently announced a measure to ban the export of cooking oil and cooking oil raw materials. "I have asked the palm oil business players to look at this problem more clearly," said the President in a statement uploaded on Youtube on Wednesday night (27/4/2022). The President's statement on the ban of the export of cooking oil and cooking oil raw materials on Wednesday night was his second.

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The announcement of the export ban sparked a backlash. Share prices of most palm oil companies fell following the announcement. The oil palm farmers also complained. A number of observers think that Jokowi's policy regarding the export ban is inappropriate and has ultimately disrupted the market.

In his explanation regarding the export ban policy, Coordinating Economic Minister Airlangga Hartarto said on Tuesday (26/4) that the export ban was only imposed on RBD palm olein.

KOMPAS/AGUS SUSANTO (AGS)

Workers arrange eggs and 16 liter jerry cans of cooking oil at Pulojae Market, Cakung, East Jakarta, Thursday (6/1/2022).

However, on Wednesday (27/4), Airlangga amended his previous statement. As quoted by this daily on Thursday (28/4), Airlangga said that that the government not only banned the export of RBD palm olein, but also crude palm oil (CPO), refined palm olein, palm oil mill effluent or palm oil waste and used cooking oil. Jokowi said, "The domestic market should be the first priority."

This situation indicates that there is a problem in the public policy decision-making process, both in terms of policy formulation and on how to announce the policy.

The controversy stemming from the inconsistency in the government’s policy is not the first. Some time ago, the government announced the ban on coal exports. However, a few days later the ban was lifted and coal exports were allowed again. This situation indicates that there is a problem in the public policy decision-making process, both in terms of policy formulation and on how to announce the policy.

The cooking oil is definitely a sensitive issue. Based on a number of public opinion surveys, most respondents are upset over the cooking oil shortage and the increase in its prices.

According to surveys conducted by Indikator Politik Indonesia and Charta Politica, the approval rating for Jokowi's government has fallen to 60 percent.

We encourage President Jokowi‘s administration to immediately take steps to stabilize the prices of basic commodities, which continue to increase. However, the government should ensure that the issuance of any policy should be based on valid data, inviting stakeholders to sit together to address problems in the community.

KOMPAS/ICHWAN SUSANTO (ICH)

Coordinating Economic Minister Airlangga Hartarto.

The process in the formulation and issuance of policy needs to be addressed by involving the stakeholders in order to find a common solution. The announcement of the government’s policy should always be accompanied by the background and context of the problem. Without both, the announcement will cause controversy and confusion. If the problem is not immediately addressed, it could erode the credibility of the government.

(This article was translated by Hendarsyah Tarmizi)