Bulog role in cooking oil distribution comes to an end

JAKARTA (JP): The government removed yesterday the distribution role of the State Logistics Agency (Bulog) for domestic cooking oil.

Minister of Trade and Industry Rahardi Ramelan said that with the new scheme, effective today, the state joint marketing office (KPB) would buy all cooking oil from the Association of Indonesian Edible Oil Industries (AIMMI) and sell it directly to market retail cooperatives (Inkoppas) in the city at Rp 3,500 per kilogram.

The cooperatives would then sell cooking oil at city markets at a maximum price of Rp 4,000 per kilogram.

KPB's head Asep Tojib said Jakarta's cooking oil supply currently stood at 22,520 tons. The amount is sufficient for 35 days' supply at 600,00 tons per day.

Previously, KPB and plantation firms had to sell their crude palm oil to Bulog, which then distributed it to several appointed refineries to be processed into cooking oil. The refineries had to sell back their cooking oil products to Bulog, which then distributed it to the domestic market.

Bulog has long been criticized for inefficiency and untransparent practices in distributing cooking oil in the country.

On Feb. 1, the agency lost its monopolies to import and distribute several important commodities under an economic reform program agreed with the International Monetary Fund (IMF). It still controls the market for rice.

Rahardi said the current scheme was just a temporary scheme and was only in force until the government came up with a better scheme which was more efficient and transparent.

Rahardi said the current scheme would come into effect only in Jakarta due to reports of a scarcity of cooking oil in the city's markets which has resulted in skyrocketing prices.

"Besides, bad distribution in Jakarta would affect cooking oil distribution in other cities," he added.

He said the next scheme -- being prepared by the ministry in cooperation with the Ministry of Forestry and Plantations, and state minister of the empowerment of state enterprises, cooking oil producers and traders -- was expected to be ready in two weeks.

The next scheme will ensure an adequate domestic supply of cooking oil with more transparency, Rahardi said.

Meanwhile, Inkoppas president H. Wirman said cooperatives would punish retailers found guilty of selling cooking oil above Rp 4,000 a kilo by cutting off their cooking oil supply. (gis)