Indonesia will subsidise 1.2 bln litres of cooking oil to cool prices
Indonesia will offer 1.2 billion litres of cooking oil at a subsidised price to consumers, the government said on Wednesday, in a bid to rein in inflation that hit a high last month on the back of a commodity boom.
The government will spend 3.6 trillion rupiah ($250.78 million) on the subsidy that will be funded from a levy on palm oil exports, chief economics minister Airlangga Hartarto and trade minister Muhammad Lutfi told a joint news conference.
Cooking oil prices have jumped significantly, due to an uptrend in palm oil prices.
Under the subsidy plan, the government will sell cooking oil at 14,000 rupiah a litre, Hartarto said. Branded cooking oil is priced more than 20,000 rupiah a litre.
High cooking oil prices, along with rising prices of eggs and chillies, were the main drivers of inflation. December’s 1.87% inflation rate was the highest in 18 months, albeit still below the central bank’s 2% to 4% target range.
The government is concerned rising prices could disrupt an economic recovery from the COVID-19 pandemic.
Lutfi said 70 cooking oil producers will be involved in the cooking oil subsidy programme. He did not name them.
Source: Reuters (Reporting by Bernadette Christina Munthe and Gayatri Suroyo; Editing by Sanjeev Miglani)