Subsidised Malaysian cooking oil flood Thai market

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PETALING JAYA: While the country is facing a depleted supply of cooking oil due to rumours of an impending price increase, shops in Thailand are inundated with the products from Malaysia, reported Berita Harian today.

According to the report, almost every shop in Danok town at the Kedah-Thailand border and Sungai Golok town, which borders Kelantan, has plenty of Malaysian cooking oil in 1kg plastic bags, as well as 5kg bottles, in supply.

In Danok for instance, Malaysian cooking oil is sold openly in at least 10 shops, barely a kilometre away from the Malaysia-Thai border, and on their packaging it is explicitly stated that the products are to be sold locally, and not for export.

The products are being sold for RM18 (5kg bottle) and RM3.50 (1kg packet), which is in contrast with the subsidised price of RM13.35 and RM2.50 written on the products, respectively.

Second Finance Minister Johari Abdul Ghani recently revealed that the selling of subsidised cooking oil outside the country is causing the government to lose RM540 million a year.

The daily also reported that cooking oil is being sold way above the subsidised price at Rantau Panjang, Kelantan, which is the major border crossing between Malaysia and Thailand for the East Coast of Peninsular Malaysia.

One kilogram of cooking oil is sold for between RM3 and RM3.80 while 5kg bottles are sold for between RM16 and RM18 each, depending on the brand.

The case is not unique to the Thai-Malaysia border. Syndicates are selling subsidised Malaysian cooking oil at high prices in Kalimantan, which borders Sabah and Sarawak in East Malaysia, said the report.

For instance, a 1kg packet of Malaysian cooking oil is sold for RM4.80 (15,000 rupiah), which is cheaper than oil produced in Indonesia, a source told the daily.

“The subsidy system, which is supposed to benefit the rakyat, is being abused by syndicates to make easy money,” he said.

According to him, modified motorcycles, with built in compartments to store contraband, are used by syndicate members to smuggle items, including cooking oil and gas, sugar and rice, across the many “rat lanes” across the Malaysia-Kalimantan border.

“The smugglers make repeated trips across the border – up to four a day, as they can only smuggle a small amount of contraband during each trip.”

Cooking oil is in scarce supply after rumours of the removal of the subsidy by the government.

Consumers started to stock up on the product, causing some shops and even hypermarkets, to run out of supply, while some limited purchase to customers.

Johari said the removal of the subsidy would not affect the product meant for export, and will not affect the people. He said cooking oil for consumers will continue to be subsidised.