The Oilita War Game

The battle over Minyakita has begun. The government, with its two strongest "ammunitions," faces off against business actors who continue to sell Minyakita at high prices. Who will emerge as the winner?

The government has decided to conduct large-scale market operations from February 24 to March 29, 2025. Its main mission is to reduce the prices of rice, garlic, consumer sugar, beef, and Minyakita, as well as to maintain the purchasing power of the public.

Over the past nine months, from June 2024 to February 27, 2025, the price of Minyakita has steadily increased and remained consistently high above the government-set retail price (HET).

Minyakita is a simple packaged cooking oil under the People's Cooking Oil program. Its supply sources come from crude palm oil exporters and several of its derivative products that are subject to the obligation to meet domestic market needs (DMO) for cooking oil.

Over the past nine months, from June 2024 to February 27, 2025, the price of Minyakita has steadily increased and remained consistently high above the highest retail price (HET). During this period, specifically on August 14, 2024, the Ministry of Trade (Kemendag) raised the HET for Minyakita from Rp 14,000 per liter to Rp 15,700 per liter.

Data from the Market Monitoring and Basic Needs System (SP2KP) of the Ministry of Trade shows that, as of February 27, 2025, the national average price of Minyakita is Rp 17,200 per liter. This price is 6.4 percent higher than in June 2024 and 8.72 percent above the Highest Retail Price (HET).

All this time, the Ministry of Trade has claimed that the average monthly stock of Minyakita exceeds the demand for Minyakita and bulk cooking oil, amounting to 170,000 tons per month. However, the adequacy of this stock has not been able to curb the rise in Minyakita prices.

There are many versions regarding the causes of the price increase of Minyakita. These include price manipulation, repackaging, and the increasingly lengthy distribution chain of Minyakita.

In fact, there is a suspicion that Minyakita was "magically" transformed into bulk cooking oil. This is considering that the price of bulk cooking oil has been higher than Minyakita lately. The government no longer regulates the HET for bulk cooking oil and has exempted the commodity from the DMO obligation.

Based on the Ministry of Trade's SP2KP, as of February 27, 2025, the national average price of bulk cooking oil is IDR 17,700 per liter. Previously, the price of bulk cooking oil was always below Minyakita.

The government is worried that the price of cooking oil will soar further during Ramadan-Eid 2025. Even under normal conditions, the government has difficulty suppressing the price of cooking oil, especially since every Ramadan-Eid, the demand for cooking oil always increases.

In the 2025 National Food Balance Projection updated on February 21, 2025, the consumption needs of various types of cooking oil during the Ramadan period in March 2025 are estimated at 488,400 tons. This need increased by 14.67 percent compared to February 2025 which was 425,900 tons.

It is no wonder that Minyakita is one of the government's main targets in a massive market operation. The two strongest "ammunitions", namely the government's cooking oil reserves (CMGP) and the Food Task Force (Satgas) are ready.

The National Food Agency stated that the CMGP that had been prepared by Perum Bulog and ID Food as of February 26, 2025 was 99,000 kiloliters. The stock mostly came from cooking oil producers. The stock of various types of cooking oil nationally in March 2025 is estimated at 815.4 kiloliters.

In the market operation in the form of a cheap food movement, the government will sell Minyakita for Rp 14,700 per liter. The price is cheaper than the HET Minyakita. The government will also flood the market by supplying Mibyakita twice as much as usual.

Retailers still have old Minyakita stock which they are buying at high prices.

Meanwhile, the Food Task Force has been asked to monitor and take action against business actors who sell Minyakita above the selling price set by the Ministry of Trade in each distribution line. The selling price of Minyakita from producers to first line distributors (D1) is set at IDR 13,500 per liter, D1 to D2 IDR 14,000 per liter, D2 to retailers IDR 14,500 per liter, and retailers to consumers according to the HET IDR 15,700 per liter.

Business actors who violate will be subject to sanctions in the form of revocation of business licenses and even sealing of business premises. They can also be subject to criminal sanctions of imprisonment for a maximum of 5 years or a fine of up to IDR 2 billion.

At least the government has held market operations in several regions for five days. The market operation is still not massive throughout Indonesia, so the price of Minyakita is still high, far above the HET.

This condition also indicates that retailers still have old Minyakita stock. The old stock was obtained, either from distributors or other retailers, at a high price. They do not want to lose by selling it cheaper than the wholesale price.

Can the government lower the price of Minyakita at least close to the HET? Who will be the winner later? Let's observe and wait for the results in the market operation period of February 24-March 29, 2025.