Cooking oil subsidy oversupply costs RM10.9 billion without reaching intended groups
KUALA LUMPUR, July 16 — Malaysia’s Public Accounts Committee (PAC) says the Cooking Oil Price Stabilisation Scheme (COSS) has wasted RM10.879 billion in subsidies since 2019 because the current system does not reach the…
Source: The Edge Malaysia · July 21, 2026 at 2:24 PM · AI-assisted report
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KUALA LUMPUR, 21 JULY 2026 —
KUALA LUMPUR, July 16 — Malaysia’s Public Accounts Committee (PAC) says the Cooking Oil Price Stabilisation Scheme (COSS) has wasted RM10.879 billion in subsidies since 2019 because the current system does not reach the intended beneficiaries.
Market Impact
PAC chairman Datuk Mas Ermieyati Samsudin said the absence of a targeted mechanism meant the government’s monthly COSS quota of 60,000 metric tons far exceeds domestic demand of between 19,000 and 30,000 metric tons.
“The monthly quota is set at 60,000 metric tons, while actual domestic demand is estimated at only between 19,000 and 30,000 metric tons,” she said.
She added that subsidised 1kg packets are being misused by ineligible groups, including foreign nationals and commercial operators.
Introduced by the Ministry of Domestic Trade and Cost of Living (KPDN), COSS caps retail prices at RM2.50 per 1kg packet to keep cooking oil affordable. However, the PAC found that damaged stocks continue to receive subsidies due to weak repacker-level controls.
“Weak enforcement at the retail level has led to conditional sales, stockpiling and sales above the controlled price,” the PAC said.
The committee also noted that two of the nine repacking companies still lack halal certification. It acknowledged the 2023 launch of the eCOSS system, which tracks supply from refineries to retailers, but said serious gaps remain.
The PAC recommended reducing the monthly COSS quota, reviewing the RM600-per-metric-ton subsidy to repackers, and accelerating the shift to a fully digital targeted subsidy system.
It also proposed redistributing refining quotas to local firms to curb the 67% share held by foreign companies, while foreign-owned firms control 67% of the quota compared with 10.6% for government-linked companies such as FGV Holdings Bhd and SD Guthrie Bhd.
Other recommendations include studying floating cooking oil prices, modelled on the liberalisation of chicken and egg prices, and enhancing border enforcement using AI, drones and CCTV.
The PAC’s report on the management of cooking oil price controls and subsidies was tabled in Parliament on Thursday.