Indonesia to subsidize 1.2 billion liters of cooking oil to cool prices

JAKARTA, Jan.5 (Reuters) – Indonesia will offer 1.2 billion liters of cooking oil at a subsidized price to consumers, the government said on Wednesday, in a bid to curb inflation that peaked on last month following a commodity boom. .

The government will spend 3.6 trillion rupees ($ 250.78 million) on the subsidy which will be funded by a tax on palm oil exports, said Chief Economy Minister Airlangga Hartarto and Minister of the Economy. Commerce Muhammad Lutfi at a joint press conference.

Cooking oil prices have risen sharply, due to an upward trend in palm oil prices.

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As part of the subsidy plan, the government will sell cooking oil at Rs 14,000 per liter, Hartarto said. Branded cooking oil costs over Rs 20,000 per liter.

High prices for cooking oil, along with higher prices for eggs and chili peppers, were the main drivers of inflation. December’s 1.87% inflation rate was the highest in 18 months, although it remains below the central bank’s 2-4% target range.

The government is concerned that rising prices could disrupt economic recovery after the COVID-19 pandemic.

Lutfi said that 70 cooking oil producers will be involved in the cooking oil subsidy program. He did not name them.

($ 1 = 14,355,000 rupees)

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Reporting by Bernadette Christina Munthe and Gayatri Suroyo; Editing by Sanjeev Miglani

Our Standards: Thomson Reuters Trust Principles.

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