YLKI Smells the Aroma of Cartel Conspiracy Behind the Expensive Cooking Oil

KOMPAS.com – Indonesian Consumers Foundation (UPPER) suspect there is practice kartel behind the skyrocketing cooking oil in Indonesia. Almost three months, the spike in domestic cooking oil prices shot out of control.

The compact producers raised prices on the pretext of adjusting to the price of palm oil (CPO) in the global market. Since the last two months, cooking oil has also contributed greatly to inflation.

The chairman of the YLKI daily committee, Tulus Abadi, said that there were several indications of cartel behavior behind the increase cooking oil price in the world’s largest palm oil exporter.

“I suspect that there are cartel or oligopoly practices. In the Law on the Prohibition of Monopolistic Practices and Unfair Business Competition,” Tulus said when confirmed Kompas.com, Wednesday (12/1/2022).

Also read: Expensive Cooking Oil Comes from Palm Planted in State Land

Kartel itself refers to a group of producers who dominate the market who cooperate with each other to increase profits as much as possible by increasing prices, so that in the end consumers are the losers.

The most visible indication of the cartel from the surge in cooking oil prices, continued Tulus, was the simultaneous increase in oil prices at the same time.

On the other hand, so far the cooking oil circulating in the market is also controlled by a handful of large companies.

“If the business cartel agrees, they conspire to determine the same price so that consumers have no other choice,” explained Tulus.

Also read: How Rich is the Conglomerate That Controls Cooking Oil in Indonesia?

Even if the price increase is triggered by a surge in demand, it is not an excuse considering that Christmas and New Year (Nataru) have passed, but cooking oil prices are still high.

Moreover, Indonesia is the largest palm oil producer in the world. For the export market, palm oil producers can rely on international prices.

The price of CPO oil on the world market, which is currently surging, cannot be a reason to increase the price of cooking oil sold domestically.

Muhammad Idris/Kompas.com Illustration of expensive cooking oil prices

cooking oil price must refer to the highest retail price (HET) that has been set by the government through the Ministry of Trade (Kemendag).

Also read: In Malaysia, Cooking Oil is sold for Rp 8,500/Kg

“We are the largest CPO producer, we are exporters not importers, so we can determine domestic CPO prices. Not international prices for national,” said Tulus.

Selling cooking oil at a high price in the country would injure consumers. Given the truth, large companies also plant their oil palm on state land through a Hak Guna Usaha (HGU) scheme.

On the other hand, the government also helps palm oil entrepreneurs a lot by helping to buy CPO for biodiesel needs. The government even helps private palm oil entrepreneurs by disbursing large biodiesel subsidies through the Palm Oil Plantation Fund Management Agency (BPDPKS).

The question of price increases due to the number of cooking oil factories that are not integrated or do not have palm oil plantations also does not make sense.

Also read: The difference in the price of Indonesian vs Malaysian cooking oil, which is more expensive?

This is because almost all major players in cooking oil producers also control oil palm plantations. Cooking oil produced by big players also jumped.

Cooking oil prices soar

Citing the page of the National Strategic Food Information Center (PIHPS) on Wednesday (12/1/2022), the price of cooking oil per kilogram is sold in the range of Rp. 19,000 to Rp. 24,000.

In Gorontalo, the price of cooking oil has even exceeded Rp 26,450 per kilogram. Whereas before soaring, the price of this vegetable oil was around Rp. 11,000 to Rp. 13,000 depending on the packaging.

Meanwhile, on a national average, the price of cooking oil in Indonesia is Rp 20,900 per kilogram of branded packaged cooking oil.

Also read: Still Expensive, Bulk Cooking Oil Price in Jakarta Reaches Rp 20,650 Per Liter

This national average price is still more expensive than Malaysia, a neighboring country which is also the world’s largest palm oil producer and has a per capita income 3 times higher than Indonesia.

The cooking oil cartel case in 2009

Allegations of cartels in oil are not new in Indonesia. Quoted from Kontan’s report on June 4, 2009, the Business Competition Supervisory Commission (KPPU) suspects the practice of cooking oil cartels in the Indonesian market.

At that time, KPPU’s Director of Communications, Ahmad Junaidi, emphasized that KPPU was now starting to investigate and was collecting data to prove his suspicions.

KPPU deserves to suspect that there is a cartel. This is because the price of local cooking oil is difficult to come down and seems unrelated to the price of palm oil which is the main raw material.

“We continue to monitor,” said Junaidi at the time.

Since last May, the price of bulk cooking oil in the market has remained in the range of Rp. 10,000 per kilogram. The Business Competition Supervisory Commission or KPPU suspects that there is a cartel by eight companies.

The big companies are Bukit Kapur Mutual Group, Musimmas Group, Sinarmas Group, Sungai Budi Group, PT Perkebunan Nusantara (PTPN) I to IV, Berlian Eka Sakti, Raja Garuda Mas, and Salim Group.

Production of fresh fruit bunches from oil palm plantations of PT Permata Putera Mandiri (PPM) and PT Putera Manunggal Perkasa (PMP), two subsidiaries of PT Austindo Nusantara Jaya Tbk (ANJ) increased.DOCK. Public Relations of PT Austindo Nusantara Jaya Tbk (ANJ) Production of fresh fruit bunches from oil palm plantations of PT Permata Putera Mandiri (PPM) and PT Putera Manunggal Perkasa (PMP), two subsidiaries of PT Austindo Nusantara Jaya Tbk (ANJ) increased.

Also read: The Trade Minister Promises Cheap Cooking Oil of Rp. 14,000 to Be Sold Next Week

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