MinyaKita Fraud Uncovered, IPB University Economist Urges Strict Oversight
An Economist from IPB University, Prof A Faroby Falatehan, has highlighted the MinyaKita case as an example of government negligence in monitoring the distribution of cooking oil.
Recent findings reveal that a one-liter package of MinyaKita actually contains only 750–800 ml. According to Prof Faroby, this fraud occurs partly because certain individuals are unafraid of engaging in dishonest practices.
The IPB University Professor of Economic Policy explained that, in addition to reduced product volume, MinyaKita is being sold at prices exceeding the official retail price (HET). While the government has set the HET at Rp15.700, MinyaKita is being sold for Rp18.000.
“The total loss amounts to Rp6.800 per kilogram, consisting of Rp2.300 due to the higher price and Rp4.500 from the reduced volume. This results in a double loss for consumers,” he emphasized.
Ironically, Prof Faroby continued, based on the realization of the Domestic Market Obligation (DMO), MinyaKita production reaches 213.988 tons per month, while the national demand is only 170.000 tons per month.
“With supply exceeding demand by 125 percent, MinyaKita prices should remain stable below the HET. However, in reality, prices are still rising,” he pointed out.
As a Professor at the Faculty of Economics and Management at IPB University, Prof Faroby asserted that the government must tighten its oversight of product pricing and quantity instead of merely implementing programs without proper evaluation.
“Monitoring and supervision should be a permanent part of governance to prevent similar cases from recurring,” he stated.
Prof Faroby also noted that the HET regulation is outlined in the Indonesian Minister of Trade Regulation Number 18 of 2024 concerning Packaged Palm Cooking Oil and the Management of Public Cooking Oil.
Producers violating the HET may face administrative sanctions, including up to two written warnings within seven working days. “If violations continue, sanctions may escalate to temporary sales suspension, warehouse closures, product recalls from distribution, and even business license revocation,” he explained.
Businesses selling products above the HET could be violating Law Number 8 of 1999 on Consumer Protection.
Article 8, for example, states that business actors are prohibited from producing and/or trading goods and/or services that do not meet or do not comply with the required standards and provisions of laws and regulations (paragraph a); and do not match the net weight, net or net contents, and quantity in the count as stated in the label or etiquette of the goods (paragraph b).
Meanwhile, Article 19 emphasizes that business actors are responsible for providing compensation for damage, pollution, and/or consumer losses due to consumption of goods and/or services produced or traded.
The government also holds responsibility for consumer protection oversight and enforcement, as stipulated in Articles 29 and 30 of the Consumer Protection Law.
“If violations harming consumers are found, strict action must be taken, including business license revocation,” Prof Faroby emphasized.
Prof Faroby further stated that the MinyaKita case can be resolved through the enforcement of existing regulations, including consumer compensation and sanctions for violating producers.
He also pointed out that rising prices and fraudulent practices in cooking oil distribution negatively impact purchasing power, especially during Ramadan, when consumption increases and staple prices tend to rise. The Central Statistics Agency (BPS) reported a 0,09 percent deflation in February 2025, indicating a decline in purchasing power. (IAAS/HPH)
