Syndicates greasing the system

The Star

20-07-2025

Spot check: (Left) Fuziah inspecting a packet of cooking oil during her visit to a repackaging factory at Kempas, Johor Baru. — THOMAS YONG/The Star
PETALING JAYA: A web of syndicates has been exposed for misappropriating subsidised cooking oil, repackaging it and selling it illegally as used or industrial-grade oil, reaping hefty profits by exploiting public subsidies.
Deputy Domestic Trade and Cost of Living Minister Dr Fuziah Salleh said the groups had been buying one-kilogramme packets of subsidised cooking oil at RM2.50 each, then transferring the contents into drums and mixing it with low-grade or used oil.
ALSO READ: Subsidised cooking oil misused for profit
The adulterated product was then sold for RM4 to RM5 per kg, falsely labelled as used or industrial oil.
'Investigations revealed several organised syndicates behind these schemes. Thousands of kilogrammes of subsidised oil have been seized after being diverted for illegal resale,' she said.
The ministry's enforcement teams uncovered the operations through on-ground inspections and online monitoring, including the discovery of suspicious online listings.
Syndicates used unlabelled or falsely labelled drums to conceal the oil during transport, with some attempts even made to export the illicit product.
Fuziah said three cases were initiated under the Control of Supplies Act 1961 (Act 122) last year, all in Selangor, involving seizures worth over RM364,000.
Two cases are already in court, while one remains under investigation, she said.
Under the Act, companies found guilty of misappropriating controlled goods like subsidised cooking oil face fines of up to RM2mil, while individuals risk up to RM1mil in fines, three years' jail, or both.
Repeat offenders face even harsher penalties of up to RM5mil for companies and RM3mil or five years' imprisonment for individuals.
To crack down on these abuses, the ministry has intensified enforcement through multi-agency collaboration involving the Customs Department, police, Malaysian Maritime Enforcement Agency, Malaysian Anti-Corruption Commission, and the Malaysian Palm Oil Board (MPOB).
The report in 'The Star' on subsidised cooking oil being resold as used cooking oil.
For digital spaces, the ministry has partnered with e-commerce platforms and social media companies to identify and remove suspicious listings.
The ministry also leverages its Cooking Oil Price Stabilisation Scheme monitoring system to trace the subsidised oil supply chain from refineries to retailers, and has implemented zoning distribution systems in local markets to prevent misdirection.
Fuziah said the ministry is also conducting audits on manufacturers and packagers to ensure compliance and deter misuse.
This coordinated strategy, she added, enables swift responses to public complaints and digital surveillance findings, triggering investigations, digital traceability and joint enforcement raids.
Legal action may also be taken under other relevant laws, including the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613).
'This is a serious matter involving the abuse of public subsidies. The ministry will not hesitate to act against those who profit at the expense of the rakyat,' Fuziah stressed.
The Star previously reported that subsidised cooking oil, sold at RM2.50 per kg, can fetch up to RM3.50 per kg when resold as used cooking oil (UCO), raising concerns over profiteering.
Collectors have reported cases of new oil being misrepresented as UCO to exploit the price difference.
In response, the MPOB is reviewing standards to better distinguish UCO from palm oil by-products such as sludge palm oil, particularly in the export stream.