22/08/2007 (Daily Times Pakistan), JAKARTA - Indonesia is considering subsidising cooking oil prices to make the vegetable oil affordable for the poor, Industry Minister Fahmi Idris said on Tuesday.
Subsidised cooking oil is among the options being discussed by the government to cope with soaring cooking oil prices despite a rise in export tax in mid-June to ease local prices.
The government is also considering allocating between 18-20 percent of its crude palm oil output to ensure supplies for local cooking oil processors if the export tax fails to cut cooking oil prices. “The government would provide cooking oil below market prices for the poor,” Idris told reporters without elaborating. Idris said the government was evaluating the current export tax policy but did not give details whether it would raise or cut the tax. Local cooking oil prices have risen more than 30 percent since early this year, boosted by a rally in global palm oil prices.
In June, the government raised the export tax for crude palm oil to 6.5 percent from 1.5 percent and palm oil by-products to 6.5 percent from 0.3 percent in a bid to curb exports and increase supply to domestic market. But cooking oil prices remain high despite the rise in export tax. Cooking oil at refineries in Jakarta was sold at around 8,200 rupiah a kilogram, up from 7,600 rupiah in mid-June before the government raised the export tax. Palm oil-based cooking oil is a staple in Indonesia where about half the 220 million population live on less than $2 a day. Indonesia is expected to produce 17.4 million tonnes of palm oil this year. reuters