AG report urges continued subsidised cooking oil programme with stronger price monitoring

New Straits Times

21-07-2025

KUALA LUMPUR: The Auditor General's (AG) Report 2/2025 has recommended several improvements for the subsidised cooking oil programme to the Domestic Trade and Cost of Living Ministry (KPDN), stating that it should be continued.
The report said that KPDN should aggressively monitor the retail price of subsidised cooking oil by collaborating with enforcement agencies such as local authorities to ensure compliance with the RM2.50 per packet price ceiling.
"Firm enforcement actions must also be taken immediately against sellers who charge above the controlled price, including imposing fines, revoking licences, and seizing goods," the report said.
In addition, it recommended expanding targeted subsidy distribution through programmes like the Sumbangan Asas Rahmah (Sara) initiative, which provides subsidies via special vouchers for essential goods, including subsidised cooking oil.
It said such programmes serve as effective control mechanisms to ensure government aid is used specifically for basic necessities by target groups such as the B40 income group and the hardcore poor.
"KPDN should conduct monitoring through a centralised database that records each transaction in real time and enables better detection of any misuse of these special vouchers.
"This approach not only increases transparency and accountability, but also ensures that aid reaches those who truly need it," it added.
The ministry was also advised to regularly review and improve the standard operating procedures (SOPs) of the Cooking Oil Price Stabilisation Scheme (COSS) to address existing implementation gaps, including the management of damaged cooking oil and halal certification monitoring.
KPDN should also introduce a targeted distribution policy to ensure subsidies are only given to eligible households based on specific criteria, with data referring to existing sources such as the eKasih and Padu databases.
"This measure is aimed at preventing access to subsidies by foreign nationals or commercial entities that are not eligible.
"The purchase limit for subsidised cooking oil should also be reviewed to match actual household needs and to prevent large-scale purchases for commercial use, which fall outside the intended policy scope," it said.
The ministry should also revisit current regulations to better enforce compliance by licence holders, including suspending or revoking the Controlled Goods Retail Licence (CSA) of those found violating licence terms, such as holding two licences under the same address.
Among other recommendations is the comprehensive use of the digital system eCOSS to monitor real-time records of subsidised cooking oil sales and distribution, helping to reduce data manipulation and non-compliance.
"KPDN must also require all subsidised cooking oil packaging companies to obtain halal certification as a licensing condition, and take legal action under the Trade Descriptions Act 2011 (Act 730) against companies using counterfeit halal logos," the report said.
It also called for KPDN to develop a comprehensive management procedure for damaged cooking oil, covering disposal methods, early detection, prohibition of repackaging, mandatory declaration of damaged oil, and reporting to KPDN for monitoring and record-keeping purposes.