KUALA LUMPUR, Nov 12 (Bernama) -- The Cabinet Wednesday decided that therewill be no price hike for palm oil based cooking oil in spite of the callfor a price increase by local edible oil manufacturers following higherprice of crude palm oil.

To overcome the problem, Domestic Trade and Consumer Affairs Minister TanSri Muhyiddin Yassin said the Cabinet had directed the Ministry of PrimaryIndustries to implement as soon as possible the Palm Oil Cess (tax)system.

The cess system was implemented from 1997 to 1998 when the price of palmoil sky-rocketed following the drop in the value of the ringgit againstthe U.S. dollar.

Under the system, the government collects the cess on palm oil exportedand the money is later used as subsidy for local edible oil manufacturersto defray costs.

The Malaysian Edible Oil Manufacturers Association (MEOMA) had urged thegovernment to increase the ceiling price of palm oil based cooking oil,claiming that they incurred losses due to the increase in the price ofcrude palm oil.

"With this, the issue of the manufactuers having to bear losses will beresolved with the introduction of the subsidy mechanism," he told a newsconference here.

The ceiling prices for palm oil based cooking oil are RM1.85 for 500gm,RM2.50 (1 kg), RM6.25 (2kg) and RM42 (12kg).

Muhyiddin said the government was aware of the higher production costs dueto the increase in the price of crude palm oil sustained by manufacturersbut it had also to consider the interest of consumers who wanted areasonable price of cooking oil.

On the Primary Industries Minister Datuk Seri Dr Lim Keng Yaik's statementof a possible shortage of palm oil locally, Muhyiddin said it should notbe the case.

"Malaysia is the world's biggest producer of palm oil. If there is ashortage, it is probably done on purpose," he said.

During the news conference, Muhyiddin also announced the Price ControlScheme for the coming Hari Raya Puasa, applicable from Nov 18 to Dec 2.

It covers 11 types of essential items. These are slaughtered chicken,dressed chicken, local beef, "ikan kembung hitam", eggs, long beans,cabbages (Indonesia), red chillies, desiccated coconut, shallots (India)and potatoes (China).

He said most of the prices were similar to those of last year.

Based on past experience, Muhyiddin said the ministry believed that mosttraders would stick to the control prices.

Errant traders could be fined under the Price Control Act 1946 of up toRM15,000 or two years' jail. For companies, the maximum fine is RM25,000.

The ministry has also provided a toll free line 1-800-868-800 for membersof the public to air their complaints against traders for selling theirgoods at higher prices.

-- BERNAMA