KUALA LUMPUR, July 16 — The Public Accounts Committee (PAC) has called for an overhaul of the country’s cooking oil subsidy management system after finding that the existing mechanism failed to ensure subsidised cooking oil reached those who genuinely needed it.
PAC vice-chairman Teresa Kok said the committee’s report, prepared following findings in the Second Auditor-General’s Report 2025, identified weaknesses in the management of cooking oil price controls and subsidies under the Domestic Trade and Cost of Living Ministry (KPDN), including ineffective targeting, breaches of sales conditions and supply chain management issues.
“Based on its investigation, the PAC concluded that the quota under the Cooking Oil Price Stabilisation Scheme (COSS) was set at 60,000 metric tonnes per month, while Malaysia’s actual domestic requirement was estimated at between 19,000 and 30,000 metric tonnes monthly.
“The absence of a targeted distribution mechanism meant that government subsidies amounting to RM10.879 billion between 2019 and February 2025 did not fully reach the intended recipients,” she said at a press conference in Parliament today.
Kok said the committee found that 1kg packet cooking oil was frequently misused by ineligible groups, including foreign nationals and commercial operators.
She added that the committee also found two out of nine cooking oil packing companies audited did not possess valid halal certification, despite improvements made by the Malaysian Islamic Development Department (Jakim) in the halal certification process.
Kok said KPDN’s eCOSS system, introduced in 2023, had helped monitor the subsidised cooking oil supply chain from refineries to retailers by enabling cross-checking of supply quantities at each stage of distribution.
“The PAC found serious weaknesses in the management of damaged cooking oil stocks due to the absence of specific standard operating procedures (SOPs) at packing companies.
“As a result, the government continued to bear subsidy costs for damaged stocks that would never reach consumers. Ineffective monitoring at the retail level also resulted in conditional sales practices, stock hoarding and sales above the controlled price of RM2.50 becoming increasingly widespread,” she added.
The Seputeh MP said the committee also found that market control at the refining stage was uneven, with foreign companies controlling 67 per cent of the subsidised cooking oil quota, while local government-linked companies such as FGV and SD Guthrie accounted for only 10.6 per cent, with the remainder held by local companies.
Kok said the profit margins for re-packers receiving a RM600 per metric tonne subsidy appeared excessive compared with actual processing costs, increasing the government’s subsidy burden without reasonable justification based on operating expenses.
Following its findings, PAC proposed eight recommendations, including reducing the monthly cooking oil quota to better match actual domestic demand and reviewing the RM600 per metric tonne subsidy rate given to packing companies.
The committee also recommended that subsidy payments to packing companies should only be made for usable cooking oil stocks to prevent unnecessary government expenditure.
Kok said PAC had also recommended that the government accelerate the transition from blanket subsidies to a fully digital targeted subsidy mechanism through eCOSS.
PAC further suggested that KPDN study the possibility of allowing cooking oil prices to float openly, similar to the floating price models for chicken and eggs, to reduce subsidy expenditure and encourage healthier competition at the retail level.
Other recommendations included reallocating refining quotas to competitive local companies, strengthening enforcement coordination between KPDN, the Home Ministry (KDN) and other agencies, as well as increasing the use of technologies such as artificial intelligence, drones and CCTV at border hotspots and smuggling transit areas.
Kok said KPDN should also strengthen compliance monitoring across every level of the supply chain, including among packing companies, and take firm action against quota holders who fail to comply with requirements.
