KUALA LUMPUR: Savings from reducing subsidised cooking oil supplies will be used to help keep bottled oil affordable, says Datuk Armizan Mohd Ali.
The Domestic Trade and Cost of Living Minister said the quota for subsidised packet cooking oil had been reduced from 66,000 to 55,000 metric tonnes, with a further reduction to 50,000 tonnes targeted.
He said the savings would not mean the withdrawal of subsidies, but would instead fund price interventions for bottled cooking oil.
"The Cabinet has agreed that we can use the savings to intervene when crude palm oil (CPO) prices are high," he said when winding up committee stage debates on the Supply Bill 2027 in the Dewan Rakyat on Thursday (Nov 12).
Armizan said CPO prices reached RM4,400 per tonne in October, which could have pushed the price of a 5kg bottle of cooking oil to RM34.
However, through the intervention mechanism, the ministry maintained the ceiling price at RM30.90.
He said the bottled cooking oil industry was facing mounting cost pressures, with one manufacturer having stopped production.
Armizan said the subsidised packet cooking oil quota had remained for almost 10 years, despite a Cabinet decision to reduce it from 60,000 to 45,000 tonnes.
When he took over the ministry, the quota had increased to 66,000 tonnes.
He said the government conducted an internal audit of the programme following a Cabinet decision, while the Auditor-General's Department also carried out an audit, with its findings tabled in Parliament and subsequently followed up by the Public Accounts Committee (PAC).
"The programme had been plagued by smuggling and leakages and the ministry had to introduce measures including the eCOSS system and its mobile application to track subsidised cooking oil from repackers and wholesalers to retailers and consumers," he said.
He also said the Finance Ministry had allocated RM900mil for the programme in the past two years, with the allocation increasing to RM930mil and reaching RM1bil next year.
However, the actual financial implications were between RM1.7bil and RM1.9bil in some years due to rising CPO prices, requiring additional expenditure to cover the shortfall.
Armizan said his ministry would continue reducing the quota gradually, using eCOSS data to ensure that subsidy targeting was carried out more effectively without disrupting supplies to consumers.
