Indonesia plans to raise price of subsidized cooking oil amid rising raw material costs

Indonesia’s Minister of Trade Budi Santoso announced that the government is considering an increase in the maximum retail price of subsidized cooking oil MinyaKita. He emphasized that the move is not связан with any shortage of crude palm oil (CPO) caused by its use in the B50 biodiesel program, but rather driven by rising global prices.

According to the minister, the cost of CPO has surged significantly, leading to higher production expenses for manufacturers. At the same time, the price cap for MinyaKita has remained unchanged for the past three years, making an adjustment economically necessary.

Global CPO prices continue to climb amid geopolitical tensions, particularly conflicts in the Middle East. Additionally, growing demand for palm oil as an alternative energy source—due to high petroleum prices—has further fueled the upward trend.

Analysts project that in the second quarter of 2026, CPO prices increased from $1,165 to over $1,700 per ton, with expectations of reaching nearly $1,783 per ton by June. This trend is putting pressure on domestic markets and prompting the government to balance consumer protection with producer sustainability.

Currently, the maximum retail price for MinyaKita stands at 15,700 Indonesian rupiah per liter and is regulated by the government. A final decision on the proposed increase has not yet been made and will follow consultations with relevant financial and regulatory authorities.

Tags: subsidies, Indonesia, prices, palm oil