Why Cooking Oil Prices Could Rise Due to the B50 Programme

A lecturer from the Faculty of Economics and Business at UPN Veteran Jakarta, Achmad Nur Hidayat, has revealed that the B50 biodiesel programme could become one of the triggers for rising cooking oil prices. “B50 is not the sole cause of the current rise in cooking oil prices, but it amplifies the risk of price pressures if not properly managed,” Achmad stated in a written release on Friday, 24 April 2026. B50 consists of a 50% blend of vegetable fuel based on palm oil (CPO) and 50% diesel. Cooking oil also uses CPO as its raw material. The Indonesian Palm Oil Entrepreneurs Association (Gapki) estimates that the annual requirement for B50 is 16 million tonnes. Although demand is increasing, CPO production remains stagnant. This year, Gapki forecasts CPO production to reach 52 million tonnes, an increase of only 1 million tonnes compared to 2025. This rise in domestic demand without significant production growth is expected to sacrifice exports. Although aimed at strengthening energy independence, Achmad reminds the government to consider the policy’s impact on food prices, inflation, purchasing power, and social stability. The B50 programme could pressure needs such as exports and food if not balanced with substantial production. If the additional CPO demand for biodiesel is too aggressive, Achmad predicts that cooking oil producers will view their raw materials as more expensive. Although the government emphasises that national CPO production is still ample and B50 needs will be sourced from export quotas, according to him, the market will still factor in risks, profit opportunities, global CPO prices, and domestic demand signals. To avoid impacting food needs, Achmad encourages the government to impose thresholds. For example, when cooking oil prices exceed a certain limit or Minyakita stocks fall below safe levels, the government must bolster CPO supplies for food. He also suggests strengthening Minyakita distribution through state-owned food enterprises, people’s markets, and official retailers. Then, enhancing supervision from producers to distributors and wholesalers. “The government must not just announce safe stocks but ensure those stocks reach market shelves,” he said. Additionally, Achmad requests that B50 implementation be gradual with periodic evaluations so that energy independence does not sacrifice kitchen resilience. In his calculations, he estimates that cooking oil prices will remain stable in the next one to three months with risks of rising ahead of B50 implementation. Cooking oil prices can be maintained at the highest retail price (HET) as long as the Domestic Market Obligation (DMO) and distribution run effectively. However, if the market perceives B50 absorbing more CPO, prices could rise, especially in areas with weak logistics. This price increase, according to Achmad, will occur gradually, and small consumers will find it harder to obtain affordable cooking oil.