“The mineral water that people drink daily cost much more than the price of unsubsidised cooking oil that people use daily,” he said while replying to Lim Guan Eng in a supplementary question during the Minister’s Question Time at the Dewan Rakyat today.
Lim had asked if it was true that the rationalisation of cooking oil would increase the living cost of a family by RM50 per head a year, which could come up to RM250 for a family of five per year.
Hamzah said the ministry estimated that each individual uses only 1.5kg of cooking oil per month.
According to Hamzah, based on this, if subsidies were removed completely, and cooking oil prices rose to about RM4 per kg, it would only amount to a RM2.25 increase in expenses for each individual.
“If it increases to about RM4, it will only cost RM1.50 more for the packet of 1.5kg oil a month. That means it will only increase by RM2.25 per head a month.
“Where did the RM50 come from. Just now you said RM250 per family. I am surprised,” he told Guan Eng.
A 500ml bottle of mineral water is on average sold for about RM1.20, while a 1.5ml bottle is sold for close to RM3.
From Nov 1, the cooking oil subsidy will be removed for all package sizes except 1kg polybags, while the prices of remaining package sizes will be determined by market forces. The price for the 1kg polybags remains at RM2.50.
In 2015, the price of cooking oil was between RM2,300 and RM2,600 per metric tonne. In September this year, the ministry had said the price shot up to almost RM3,000 per metric tonne.
The ministry had said the rationalisation of cooking oil would also curb smuggling activities.
When tabling Budget 2017, Prime Minister Najib Razak said subsidies amounting RM10 billion would be used for fuel, cooking oil, gas, toll and public transport.