Faisal Basri Advocates for Price Equalization as Palm Cooking Oil Remains Costly Despite Cheaper CPO

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Faisal Basri. Photo : Special

PALMOILMAGAZINE, JAKARTA – Senior economist Faisal Basri has once again expressed concerns regarding the market prices of crude palm oil (CPO), emphasizing its significant impact on both the food processing and biodiesel production sectors.

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He underscores the subsequent effects on the pricing of palm cooking oil within society, attributing the persistent high costs to the lack of price reduction.

Basri elaborated on the challenges faced by stakeholders involved in CPO trading for biodiesel production, highlighting the escalating costs. This increase is primarily attributed to government initiatives aimed at advancing the biodiesel program, which involves blending biodiesel with fossil fuel on a national scale.

Also Read : Economist Opinions about CPO Price

The current biodiesel program, known as B35, is set at 35 percent, and there are expectations for it to progressively climb to B100.

In a discussion with the theme “Cerita Tentang Hulu-Hilir Sawit Hari Ini dan Esok: Dampak Kebijakan Biodiesel Terhadap Pasokan Minyak Goreng”, Faisal Basri said that the government created two prices that delivered impacts to price fluctuation of palm cooking oil in the markets “The government provided leeway (but) what is to blame is the exports. One thing to blame is biodiesel,” Faisal said.

He also told distortion in market mechanism that made palm cooking oil remain expensive though CPO gets cheaper. Palm cooking oil is about Rp 19.000 per liter while CPO gets cheaper.

To solve the issue, he encouraged the government to act by making CPO price the same both if it is processed to be food and biodiesel. This would reduce price fluctuation and escalate palm cooking oil stocks in the society.

He also emphasized that it is important to get ‘one price’ for the same product which means it is equalization. It needs supervision too. Faisal thought allocation supervision would escalate corruption potential and price equalization could be the wiser thing to prevent CPO price challenge in Indonesia. (T2)

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