Alleged cartel involving 21 cooking oil firms under investigation

The Jakarta Post, Jakarta | Thu, 11/26/2009 9:55 PM

The Business Competition Supervisory Commission (KPPU) is investigating an alleged cartel practice involving 21 cooking oil companies nationwide.

KPPU spokesman Ahmad Junaidi said Thursday that the commission would summon Trade Minister Mari Elka Pangestu to clarify the ministry's policies in connection with the cooking oil business.

"We have yet to set the date for the questioning. But we will surely summon her, at least the ministry official in charge of cooking oil business. They must explain how come such an alleged cartel practice could happen," Junaidi told The Jakarta Post.

He said the Trade Ministry was supposed to intervene with the cooking oil market to stabilize the prices, he said.

Cooking oil's normal price ranges around Rp 7,000 (US$0.7) per kilogram, he said, but once it soared to Rp 15,000 per kilogram.

The investigation was followed the public outcry that the cooking oil prices had significantly boosted since the early 2009.

KPPU's preliminary investigation found that 21 major cooking oil companies, as well as some CPO producers, were showing indications of cartel prices.

"The indications showed that the companies might have made mutual agreements to set high cooking oil prices," he said.

Cooking oil prices were supposed to be linear with CPO prices. However, the commission found that cooking oil prices remained high despite the declining CPO prices, Junaidi said.

"KPPU is now undergoing a further investigation into the case and expect to finish it in February," he added.

The commission has summoned all the companies to undergo a questioning.