PUTRAJAYA: The price for a 1kg cooking oil pack will remain at RM2.50, said Domestic Trade, Cooperatives and Consumerism Minister Hamzah Zainuddin, allaying fears of a price increase sparked by rumours.
He also rubbished rumours that Putrajaya planned to do away with cooking oil subsidies for 1kg packs.
“When I said we want to carry out rationalisation, some people assumed that the cooking oil price would be increased to between RM3.70 and RM3.90 per kg.
“I had always said that subsidies must be maintained,” he told reporters in a press conference at the Domestic Trade, Cooperatives and Consumerism Ministry.
However, Hamzah said the subsidy would be removed for other packages, including the 5kg polybags, effective Nov 1.
He explained that this move was in line with the government’s cooking oil rationalisation plan.
“I had a discussion with Prime Minister Najib Razak recently, and we agreed that what was most important was the low-income group.
“We understand that these are the people who usually purchase the 1kg packs. That is why I’m announcing today that price for the 1kg polybag will remain at RM2.50.”
Hamzah said when it came to rationalising subsidies, the government took into account several things before revising prices, such as the increase of the global olein (raw palm) oil price.
He explained that the removal of subsidies was a necessary move due to the increase in price of average cooking oil to RM600 per metric tonne in less than a year.
“In 2015, the price for cooking oil was between RM2,300 and RM2,600 per metric tonne. However, in September this year, the price shot up to almost RM3,000 per metric tonne.
“Most countries in Asean are selling cooking oil at between RM3.50 and RM4 after factoring the packaging costs, but we are not doing so to protect the interests of the poor,” he said.
Hamzah added that the government had spent an additional RM400 million over the budget allocated for cooking oil subsidies this year alone due to inflation.
Recently, it was reported that subsidies for cooking oil would be removed in stages beginning next month, eventually leaving only subsidies for 1kg packages.
It was also reported that subsidies for all cooking oil packages, other than the 1kg and 5kg bottles, will be removed on Nov 1.
This had caused a shortage of cooking oil supply as consumers started to stock up on the product. Some shops and even hypermarkets ran out of supply, while some outlets limited the purchase of the product.