26/07/2011 (The Star) - Subsidised cooking oil in Malaysia is meant for the targeted group, which is household consumers.

In reality, however, the locally subsidised cooking oil more often than not has extensively been abused by the non-targeted groups.

Among them are restaurant operators, hawkers and small-scale food-based industries. Some industry experts also claim that about 10% of the total domestic subsidised cooking oil quota has being smuggled into neighbouring countries.

It is also very predictable that whenever a festive season is approaching, shortages in the subsidised cooking oil would crop up.

Currently, Malaysian consumers are again feeling the brunt of a shortage in cooking oil with the approaching fasting month of Ramadhan and also Hari Raya Puasa.

This situation is being revisited after the January-February cooking oil shortages following the Chinese New Year (CNY) celebration.

And again, the Malaysian Palm Oil Board (MPOB), being the monitoring body, had been instructed by the Government to increase the monthly quota.

It is believed that the cooking oil quota meant for August will be brought forward much earlier to this month to cater for the so-called higher demand and to ease the shortage situation.

This will also translate into an availability of about 75,000 tonnes of cooking oil in the market by August. MPOB previously has also been asked to bring forward part of the February cooking oil quota by 14,000 tonnes to be incorporated into January's 70,323 tonnes quota given the severity of the cooking oil shortage in Malaysia prior to the CNY in early February.

However, industry observers said that out of the total increased quota, only about 40,000 tonnes or at most 45,000 tonnes would be consumed by the targeted household consumers. The remaining would fall into the wrong hands i.e. the non-targeted groups.

Therefore, the most logical question raised yet again is why the Government is being too obliging to fork out about RM1.7bil in annual subsidies for cooking oil, when as high as 30% of the subsidised cooking oil landed up with the non-targeted groups or smuggled out of the country for profiteering purposes?

In Malaysia, the subsidised cooking oil is sold at RM2.50 per kg while in countries like Thailand, the price is nearly doubled.

How indeed could Malaysia, being the second-largest producer of crude palm oil (CPO) in the world, be facing a shortage in palm-based cooking oil given the fact that CPO the main raw material is ample and available the whole year round.

In fact, the MPOB end-June palm oil stocks is at an 18-month high, exceeding the two-million-tonne mark.

Something should be done to ensure the non-targeted group purchase cooking oil at the average market price of RM3.00-RM3.50 per kg currently instead of the subsidised price of RM2.50 per kg.

In fact, part of the Government's subsidy for cooking oil could be channelled into the palm-based biodiesel sector to support the growth of the green energy initiative.