KUALA LUMPUR: The government has been urged to phase out the cooking oil price stabilisation scheme and channel its allocation to more targeted assistance such as Sumbangan Asas Rahmah (SARA), following claims of leakages and weaknesses in its management.
Tan Kar Hing (PH-Gopeng) said the move would ensure public funds are used more effectively, especially as the government faces fiscal constraints and rising debt servicing costs.
He said the Public Accounts Committee report tabled in July exposed several weaknesses in the implementation of the cooking oil price stabilisation scheme, including quota oversupply, subsidy management and transparency of payments to refineries and cooking oil packaging companies.
“I would like to propose that this programme be abolished in stages so that we can focus on a more targeted approach like SARA, which I feel is a true example of prudent spending and use of targeted subsidies,” he said when debating the 2027 budget in the Dewan Rakyat.
Tan said RM10.879 billion had been spent on the scheme from 2019 to 2025, equivalent to about RM1.55 billion a year.
He said 67% of the scheme’s quota was controlled by foreign-owned companies, while only a small portion was managed by local companies.
He said sometimes the product is not even available in the market, and there are enforcement issues as well.
On concerns that abolishing the cooking oil subsidy could increase operating costs for food and beverage traders, and burden consumers, he said the scheme was originally not intended for businesses, although some microenterprises were believed to be using the subsidised cooking oil.
Tan also said the government needs to be cautious with the 2027 budget revenue projection of RM380 billion as the figure has not taken into account the impact of new fiscal measures, including individual and corporate tax cuts.
He said the government has also ordered a RM10 billion cut in operating expenditure across all ministries this year, with the country’s debt servicing cost expected to reach RM61 billion next year.
He questioned whether the government can ensure the operating balance remains in surplus this year and next year, and sought clarification on measures to avoid repeated spending cuts.