08/01/2008 (Radio Australia) - Malaysian retailers have been forced to ration cooking oil purchases after the government imposed restrictions to combat shortages.

While rationing was supposed to begin on Monday, Malaysia's Bernama new agency reports retailers were already imposing restrictions over the weekend.

It is believed the shortage was brought about by price hike rumours that caused the panic buying.

Malaysian authorities have blamed it on the hoarding of supplies.

Radio Australia's Girish Sawlani reports that measures to ease the recent shortage may not be enough to prevent future deficiencies.

Malaysia's deputy Prime Minister, Datuk Seri Najib Razak, has tried to calm tensions.

"Actually if we don't indulge in panic buying and there is no hoarding there will be adequate supply of cooking oil," he said, through translation.

"There is only shortage when there is excessive demand."

More than just excessive demand
Khoo Kay Peng, executive director of the Kuala Lumpur based Socio Economic Development and Research Institute, SEDAR, told Radio Australia however that panic buying is not the only reason for the shortage.

"Cooking oil in Malaysia is heavily subsidised and for that reason you have smuggling activities over the border, especially to Thailand, Indonesia and that is causing a lot of problems," Khoo Kay Peng said.

Government measures 'don't make sense'

To combat the recent shortage, Malaysia's domestic trade and consumer affairs ministry announced restrictions on the purchase of cooking oil - each buyer can only purchase five kilograms of oil.

Khoo Kay Peng says businesses which are reliant upon large quantities of cooking oil will face problems in daily operations because of the rationing.

"It doesn't make sense, I mean, once you have a limit for people to buy then you are confirming that you do not have enough cooking oil for the market," he said.

"That would encourage people to get their children to go out and buy more and keep it as stock."

It is not the first time Malaysians have experienced acute shortages of daily consumer goods - the country had previously fallen in short supply of sugar, diesel and flour for the same reasons.