‘Govt paid an extra RM2.9mil in subsidies due to weaknesses’

PETALING JAYA: The Government had to pay an extra RM2.92mil in subsidies because of weaknesses in the management of the Cooking Oil Stabilisation Scheme (COSS).

The 2015 Auditor-General’s Report (Series 2) said the total subsidy paid from 2013 to April this year was RM2.388bil.

To prevent distribution abuse or leakages, it recommended that the Plantation Industries and Commodities Ministry monitor and control cooking oil constantly.

This is also to ensure that subsidised cooking oil is available in the market, the report said.

Moreover, it added, the National Blue Ocean Strategy should be established in collaboration with Domestic Trade, Cooperatives and Consumerism Ministry to help in the monitoring at the retail stage.

The report also called for the revision of calculations used for COSS quota, and an immediate stop to toll-pack activities.

“Temporary quota packs should be supported with justifications outlined in Standard Operating Procedures and distribution should not exceed six months and the COSS-approved quota,” the report said.

It added that the COSS claim procedure, which was solely based on documentation, should be improved.

According to the report, temporary packaging quota was given to 10 refineries and eight packaging companies without complying with the SOP and it was prolonged from nine to 12 months.

“As of April, temporary packaging quota approval has resulted in excess maximum quota limit between 64 to 464 tonnes per month.

“Hence, there was an increase in government subsidy expenditure estimated at RM2.92mil,” said the report.

The Plantation Industries and Commodities Ministry implemented COSS due to the higher crude palm oil prices in the second quarter of 2006 and early 2007.

It is a funding scheme to subsidise refineries on a monthly basis to keep prices down for consumers.

“As of April, the ministry had approved monthly cooking oil quota amounting to 82,169 tonnes for 25 refineries and 241 packaging companies,” the Auditor-General’s Report (Series 2) said.