It is a lousy exit plan for the withdrawal of Government subsidy for palm oil in bottles

The Domestic Trade and Consumer Affairs Minister Datuk Seri Alexander Nanta Linggi has announced yesterday that the subsidies for palm cooking oil in bottles of two, three and five kilogrammes will be stopped from July 1, 2022. He also informed that the subsidy for cooking oil in one kg polybag packages which is offered to consumers at RM2.50 per packet would continue.

This is a lousy exit plan from the Government as there has been a stream of reports on the continuous shortages of subsidized cooking oil in the market and also the rampant smuggling activities across the border for the subsidized cooking oil.

This suggests the poor planning and execution of the Cooking Oil Subsidy Programme (COSS). Can the Government reveal more information on Cooking Oil Subsidy Programme (COSS)? Does it achieve its initial objective? I urge the Government to publish the Evaluation Report on the effectiveness of COSS. The programme is supposed to relieve the burden of consumers due to the high international price of palm oil.

The Government has collected windfall profit levy and various taxes from the palm oil industry. It is estimated the windfall profit levy collected for 2022 will be a record high of exceeding RM1 billion.

This is due to the fact that the Government under Budget 2022 has increased the threshold price for crude palm oil (CPO) windfall profit levy. Local palm oil producers are subject to a standardised 3% levy when CPO prices exceed RM3,000 per tonne in Peninsular Malaysia and surpass RM3,500 per tonne in Sabah and Sarawak.

Therefore, the Government must utilise windfall profit levy and various taxes, as well as levies, contributed by the palm oil industry to relieve the burden of consumers.

Wong Hon Wai
MP for Bukit Bendera
Media statement by Wong Hon Wai in Penang on Wednesday, 22nd June 2022