Implementation Barriers Towards A One-Price Policy On Cement Commodities
Avif Haryana (*), Yati Nuryati, Dwi Wahyuniarti Prabowo
Center For Domestic Trade Analysis, Trade Center and Policy Agency, Ministry of Trade
*vifhary[at]gmail.com
Abstract
Inter regions price disparity of cement in Indonesia has negative impact on infrastructural development. One of ways to minimise the above impact is by proposing one price policy for cement commodity. This study aims to address barriers that will arise if a single price cement policy is implemented and propose policy to reduce cement prices disparity between regions. Questionnaires and Focus group Discussion (FGD) are the instruments to collect data. These data were analysed using Regulatory Impact Assesment (RIA). The study found that the cement price disparity only occurs in some remote and border areas where logistics facilities are far behind. Also, it was found that one price cement policy would be difficult to be implemented. The reasons were due to 6 barriers: (i) logistical costs from factories to consumers; (ii) differences in the policies for regulating freight transport that vary between regions; (iii) production centers in Java while consumption spread throughout Indonesia; (iv) ownership status of private cement factories; (v) limited and varied frequency of transportation of transportation modes; (vi) consumers perceptions of cement brands vary in each region. However, from the perspective of CBA of RIA approach, there are only two policies that need to be considered seriously, those are, regional targeted subsidy and ceiling regional retail price policies.
Keywords: cement, price disparity, one-price policy, cost and benefit analysis
Topic: Trade policies strategic Responses