Subsidised Cooking Oil: KPDN Urged To Review Regulations, Improve SOP

KUALA LUMPUR, July 21 (Bernama) -- Weaknesses have been identified in the implementation, monitoring and enforcement of the subsidised cooking oil programme based on the regulations and standard operating procedures (SOP) of the Ministry of Domestic Trade and Cost of Living (KPDN).

According to the 2025 Auditor-General's Report Series 2 tabled in the Dewan Rakyat today, these weaknesses include the sale of subsidised cooking oil beyond the permitted limit, open sales to all categories of consumers, and non-compliance with the Scheduled Controlled Goods (CSA) retail licence.

Other shortcomings identified were prices of subsidised oil exceeding the set ceiling price, absence of SOPs for managing spoiled subsidised oil, and lack of halal certification.

“The current policy also does not specify that the distribution of cooking oil must be targeted at eligible and deserving groups, resulting in foreigners also benefiting from the government’s cooking oil subsidy,” the report said.

The audit also revealed that a total of 55,167 kilogrammes of subsidised cooking oil were sold to ineligible parties such as eateries, restaurants, vendors, and non-governmental organisations, which contravened paragraph 7.3.4(g) of the SOP under the Cooking Oil Price Stabilisation Scheme (COSS).

In addition, 713,442 kg of cooking oil were found to have been sold above the purchase limit of three packets per transaction for each customer as stipulated in a KPDN letter dated July 21, 2022.

The report also highlighted manipulation of sales information by wholesalers and retailers, involving discrepancies in transaction records in stock books for 13,124 kg of cooking oil. It also noted that subsidised cooking oil was sold at between RM2.60 and RM4.00 per packet, exceeding the controlled price of RM2.50.

There was also no clear procedure for managing spoiled cooking oil or for controlling its sale, which led to two companies storing 942 kg of spoiled cooking oil for sale to used cooking oil traders, while 16 companies were involved in repackaging spoiled oil.

“Out of 72 packaging companies sampled, nine or 12.5 per cent did not possess halal certification, while six of them printed halal markings on cooking oil packaging despite lacking such certification,” the report said.

As such, KPDN is recommended to regularly review and improve the COSS SOPs to address implementation gaps in the existing programme, including in the management of spoiled cooking oil and halal certification monitoring.

It is also urged to set targeted distribution policies to ensure subsidies are given only to eligible households based on established criteria.

KPDN is also advised to adopt digital systems such as the eCOSS for comprehensive real-time monitoring of subsidised oil sales and distribution, to reduce data manipulation and non-compliance. 

The audit also recommended that the ministry review existing regulations to better enforce compliance by licence holders, including suspending or revoking CSA licences of those found violating conditions, such as holding dual licences at the same address.

“KPDN is also urged to monitor the retail price of subsidised cooking oil more aggressively in collaboration with enforcement agencies such as local authorities (PBT) to ensure adherence to the RM2.50 per packet ceiling price,” the report said.

The ministry is further recommended to develop comprehensive procedures for managing spoiled oil, including disposal methods, early detection, prohibition of repackaging, mandatory declarations, and reporting for monitoring and record-keeping purposes.

It is also recommended that halal certification be made a mandatory licensing requirement for all subsidised cooking oil packaging companies.

Legal action should be taken against companies printing fake halal logos under the Trade Descriptions Act 2011 and subsidy disbursement through the Sumbangan Asas Rahmah (SARA) programme should be expanded.

-- BERNAMA