Cooking oil subsidy gone by new year
Published on: Friday, October 21, 2016
Kuala Lumpur: Subsidies for cooking oil will be removed in stages beginning next month, eventually leaving price controls only for 1kg packages.According to The Star Online news portal, subsidies for all cooking oil packages other than 1kg bag and 5kg bottles will be removed on November 1. The latter subsidy will also be dropped on January 1.The move will lead to the first increase to basic cooking oil prices in a decade.
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"All retail prices of blended cooking oil in various packing sizes will also no longer be subsidised," the Malaysian Edible Oil Manufacturers' Association was quoted as saying in the news report.The association, in a statement, said the move was in accordance with the Restructuring of Cooking Oil Stabilisation Scheme (COSS) that was implemented by the Government in 2017.The move will cause the ceiling price for the 1kg polybag to rise to RM2.90 from RM2.50, and from RM13.35 to RM15.25 for 5kg bottles.In the same report, Federation of Malaysian Consumers Associations (Fomca) Deputy President Mohd Yusof Abdul Rahman expressed concern over a possible hike in prices by food traders.
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"The Government needs to ensure that traders will not increase prices by too much," he was quoted as saying.The Federation of Malaysian Hawkers Association President Yaw Boon Choon also in the same article expressed similar concern.
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"This is mainly for hawkers who use a lot of oil, such as cakoi sellers," he was quoted as saying.As part of the Government's subsidy rationalisation programme, The Star Online also reported that it expects subsidy for other basic items such as flour and 1Malaysia People's Aid (BR1M) to be further reduced next year.Meanwhile, DAP said the elimination of price controls for cooking oil while maintaining the Goods and Services Tax (GST) will further erode the spending power of lower income families.Its Secretary-General Lim Guan Eng condemned Putrajaya for removing the subsidies beginning next month, which will cause the price of blended cooking oil to climb for the first time in a decade.Lim, who is also Penang Chief Minister, said Malaysians were already being weighed down by rising prices and a weak economy, which he blamed on the implementation of the consumption tax last year."If not for the imposition of GST, the removal of cooking oil subsidies will not pose such a big problem for poor families."However, the removal of cooking oil subsidies without removing GST, will only widen income inequality and make the poor worse off," Lim said in a statement.He also rejected Putrajaya's assertion that the economy would collapse without the consumption tax, citing the projected 30 per cent drop in GST collections as evidence that the local economy was slowing due to the effects of the tax.Putrajaya continues to defend its implementation of the GST, which has been blamed for rising prices and the resultant drop in demand.Stay up-to-date by following Daily Express’s Telegram channel.
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