Tag: subsidy

Posted on

Cooking Oil In Numbers

I still see people whine about having to spend 71 Sen to 73 Sen per day on cooking oil. They write this on social media using their recently-purchased iPhone7.

The Malaysian government gives RM1.05 billion in subsidies to 23 cooking oil manufacturers to produce 1.02 billion tonnes of cooking oil per year (85,000 tonnes per month).

Every month, Malaysians use only 45,000 tonnes of cooking oil while 40,000 tonnes go missing and almost always end up in neighbouring countries. That is more than RM494 million in subsidies that should be enjoyed by Malaysians that are being enjoyed by people in other countries.
Don’t you think it is only fair that subsidies remain only for the 45,000 tonnes that we all use while the remaining oil produced go unsubsidised? The 45,000 tonnes are mostly made up of the 1kg polybags while the 40,000 tonnes are mostly in bottle packaging.
The RM494 million should be redistributed in the form of BR1M and other uses where it benefits the target groups as well as other Malaysians in general.
Let us all be pragmatic and realistic about the situation, and more importantly – be mature in our thinking. Let us make sure only WE benefit from whatever assistance the government gives us.

Posted on

In Hot Oil

Bottled cooking oil - subsidised by the government but sold outside the country
Bottled cooking oil – subsidised by the government but sold outside the country

As soon as the government announced the removal of cooking oil subsidy for all types of cooking oil except those in the 1kg packs, all hell broke loose.  Housewives got into the panic buying mode while unscrupulous traders went on a cooking oil hoarding campaign.  Any store you go to you would either be allowed to buy just one or skg of cooking oil and nothing more.  Some stores have even ‘run out‘ of cooking oil.

But have they really run out of cooking oil?

screen-shot-2016-11-04-at-13-54-34

Every day now we would get news of stores, vacant houses being raided and tonnes of cooking oil discovered by the Ministry of Domestic Trade, Cooperatives and Consumerism officers.  It is obvious that store owners are hoarding to profit from the increase in cooking oil prices.  That is causing the ‘shortage’ we are seeing now.

screen-shot-2016-11-04-at-13-55-00

So, why remove cooking oil subsidy?

Every month, the government subsidises 23 cooking oil producers to produce 85,000 tonnes of cooking oil per month.  Studies show that Malaysians only use 45,000 tonnes of cooking oil per month.  Approximately 40,000 tonnes are accounted for and are believed to have been smuggled to other countries.  These producers/companise that smuggle out these cooking oil double their profits through the subsidies received from the government, and also for selling the oil at a higher price abroad!

It is the bottled type of cooking oil that have been found to be smuggled abroad because they have better mobility than those in the 1kg packets. 1kg packet-cooking oil are used mainly by those from the lower income bracket.  This is why the government is maintaining subsidies only for the 1kg packets while the bottled ones have theirs removed.  This way, the subsidy reaches the intended group, while the subsidies removed from bottled cooking oil could be put to better use to assist those in need through some other means.

I am all for the removal of subsidy and the chanelling of subsidies removed to address the needs of the lower and lower-middle income groups.  Why should I complain about it? The 5kg bottled oil that will cost me RM15.25 this month can last my 10-member household three weeks. So that comes to about 71 sen per day!  You people spend more on cigarettes yet you complain about cooking oil!

Get a life!