The Indonesian Retailer Association (Aprindo) mulls suing the government if the promised subsidies aimed at keeping cooking oil price low are not paid.
Aprindo Chairman Roy Nicholas Mandey said that the government owes palm oil producers Rp 344 billion ($23.4 million) in unpaid subsidies since early last year.
In the wake of edible oil shortage that drove up prices and triggered widespread criticisms in the world’s biggest palm oil-producing country last year, the trade minister issued a regulation obliging retailers to sell cooking oil at Rp 14,000 or just below US$1 dollar a litre, against the average market price of Rp17,000 – 20,000 (US$1.14-US$1.35).
Mandey said, “The government must pay the Oil Palm Plantation Fund Management Agency US$23.4 million for the sales of 40 million litres of subsidized cooking oil from 19 to 31 January 2022. The debt comes as a result of the one-price policy.”
The association will resort to a lawsuit only if all available options have been exhausted.
He said retailers might reduce or even stop the purchase of cooking oil from producers which can lead to another shortage as one of the options to force the government to repay the debt.