PAC finds billions of ringgit in public funds possibly wasted
PETALING JAYA: Concerns are mounting over possible leakages in Malaysia’s subsidised cooking oil programme after the Public Accounts Committee (PAC) found weaknesses in quota planning, enforcement and distribution that may have caused billions of ringgit in public funds to be wasted.
The Federation of Malaysian Consumers Associations (Fomca) said the findings highlighted serious flaws in the subsidy delivery system, stressing that subsidies must benefit those who genuinely need assistance rather than create opportunities for misuse.
Fomca chief executive officer T. Saravanan said every ringgit lost through leakages represented public funds that could have been channelled towards essential services such as healthcare, education and public transport.
“Fomca views the PAC’s findings very seriously. If the reported figures are accurate, the situation reflects a major weakness in the subsidy delivery system rather than the subsidy policy itself,” he said.
However, he cautioned against creating unnecessary concern over supply availability, saying reforms should focus on improving the system while ensuring affordable cooking oil remains accessible to consumers.
Saravanan agreed with the PAC’s suggestion to look at the monthly subsidy limit and speed up the rollout of a targeted digital subsidy system like eCOSS, but he emphasised that any changes should be based on accurate consumption data and made slowly.
“Digital systems have the potential to significantly reduce leakages and improve monitoring, but they must remain simple, reliable and accessible, especially for senior citizens, rural communities and those with limited digital literacy,” he said.
Universiti Teknologi Mara senior lecturer in economics and financial studies, Dr Mohamad Idham Md Razak, said maintaining a subsidy quota far above actual demand could lead to economic inefficiencies, including diversion to non-target groups, commercial misuse and smuggling.
“An oversized allocation increases the likelihood that public funds do not reach intended beneficiaries. It also distorts market signals and encourages overconsumption.
“Reducing the quota or moving towards targeted subsidies could improve spending efficiency, but the transition must be carefully managed to avoid supply disruptions and hardship among vulnerable groups,” he said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the government could explore using existing systems such as MyKad for subsidy distribution, although a thorough study would be needed to prevent technical difficulties.
He also said a floating price mechanism could improve efficiency but must be introduced gradually with clear communication to ensure public acceptance.
Meanwhile, Arief Hamizan, head of research and policy advocacy at the Center to Combat Corruption and Cronyism (C4 Center), said the issue reflected weaknesses in both subsidy planning and execution.
“The government was operating with inadequate data, and there was a lack of monitoring to ensure subsidies reached the intended consumers,” he said.
He called for stronger governance measures, including regular reporting, independent audits and greater transparency on subsidy allocation and distribution outcomes.
“They must be held accountable to ensure these subsidies actually benefit the households they are meant to assist,” he said.
