KUALA LUMPUR: The Government spent RM3.886bil on cooking oil subsidies in 2024 and 2025, more than the RM3.278bil it collected from the windfall profit levy on palm oil over the same period, says the Finance Ministry.
The ministry said the levy was imposed only on profits above a threshold based on crude palm oil (CPO) prices published monthly by the Malaysian Palm Oil Board.
In the peninsula, a 3% levy applies when CPO prices exceed RM3,150 a tonne, while in Sabah and Sarawak, the 3% levy applies above RM3,650 a tonne.
Under Article 97(1) of the Federal Constitution, the levy is Federal Government revenue and goes into the Federal Consolidated Fund, the ministry said in a written parliamentary reply on Thursday (Oct 8).
It said the money was then reallocated through the annual budget, including for subsidies under the Cooking Oil Price Stabilisation Scheme (COSS).
The Government is still subsidising cooking oil to protect consumers from rising CPO prices, it added.
On the retrospective validation of the levy, the ministry said the matter was administrative in nature.
It said the collection could be validated through a validation Bill, as had been done under validation Acts passed by Parliament before.
"This approach is to avoid refunds that should not be made," it said.
It was replying to Bakri Jamaluddin (PN-Tangga Batu), who asked for the moral and governance justification for the Bill, which he said involved a retrospective collection of RM7.6bil.
He also asked why the levy was channelled to the Consolidated Fund for consumer subsidies instead of a special trust account for the industry.
