This is the response from UM Surabaya economists about the president giving BLT cooking oil

• 03 Apr
• 2022

Ilustrasi gambar (Foto: Twitter/@setkabgoid)

This is the response from UM Surabaya economists about the president giving BLT cooking oil

• Article
• By Uswah Sahal
• Economy
• (0) Comments
• (548) Views

The complicated issue in the last few months related to soaring cooking oil prices has sparked a lot of criticism and input for the government. As of April 1 2022 yesterday, through a press conference that there will be Direct Cash Assistance (BLT) for cooking oil of IDR 100,000 per month for the next 3 months starting April, May and June 2022.

The target of this BLT is for a total of 20.5 million Indonesian families who are included in the list of Ministry of Social (Kemensos) programs including; Non-Cash Food Assistance (BPNT) and Family Hope Program (PKH).

This special edition of the BLT target is for 2.5 million street vendors who sell fried food. This BLT policy was launched by the government due to economic shocks that lead to inflation and consumer sluggishness in accepting prices for goods in the market.

This attracted the attention of UM Surabaya Economic Expert Arin Setyowati to provide feedback regarding this policy.

"In the context of the BLT cooking oil policy, this becomes a compensation policy carried out by the government incidentally (temporarily) in an effort to maintain the consumption level of poor and vulnerable households, especially for rising cooking oil prices," Sunday (3/4/22)

Arin explained that this effort was made to avoid market sluggishness because the ability of the community's Willings To Pay (WTP) decreased which had an impact on the sluggishness of the production sector, so compensation was given as a counterweight to the revocation of one cooking oil price from the HET (Highest Retail Price) and handed over to the market. .

"In addition, the BLT cooking oil stimulus is an effort to prevent a decline in the level of welfare of the poor and vulnerable due to rising cooking oil prices so that it does not have an impact on significant increases in the prices of other basic commodities due to cooking oil and to minimize the occurrence of a shutdown in culinary MSME production made from raw cooking oil in his business," said Arin in a written statement.

It was noted that after the government revoked the one price policy with the HET (Highest Retail Price) for cooking oil which took effect on February 1, 2022, the price was IDR 13,500/liter for simple packaged cooking oil, while premium packaging was IDR 14,000/liter.

As of April 1 2022, the price of simple packaged cooking oil per liter is around Rp. 24,000/liter and per 2 liters is almost Rp. 50,000.-. Of course this price is almost equivalent to 5 kg of rice with simple packaging and quality.

Meanwhile, the conversion amount of BLT for cooking oil allocated by the government of IDR 100,000 can be exchanged for 4 liters of cooking oil for one month assisted by the government within the next 3 months. The IDR 100,000 nominal came after going through a process of mathematical and political calculations in order to optimize the temporary balance in the polemic of soaring cooking oil prices. Because the definition of compensation is only as compensation for shocking policies for small and medium economic units as a stimulus so that there will be a market equilibrium with new prices which are temporary in nature.

"Because of its temporary nature, this BLT policy is only a safety net, which has not been able to boost the national economy significantly. So, after the BLT policy is launched, the government should prepare policies that have a sustainable impact on people's welfare and have a positive impact on the national economy," concluded Arin.