To rein in high cost of living, both the Indonesian and Malaysian governments have launched subsidised cooking oil.
Indonesia Trade Ministry has launched a new cooking oil product, Minyakita which will be sold in simple packaging at only Rp 14,000 (US$1) a litre. Producers who help the government in the production and distribution of Minyakita will be allowed to sell crude palm oil (CPO) to overseas markets at a volume 20% more than their contribution to the program. For example, a producer who supplies 7,000 tons of edible oil to Minyakita is allowed to sell 8,400 tons of CPO to the export markets.
Earlier, the Indonesian government banned CPO exports in the wake of serious edible oil shortage in the country. The simple packaging will also help in overcoming distribution issue faced in the outer provinces and districts where it is difficult to distribute cooking oil in bulk cargo. ‘Minyakita’ has already been registered as a trademark but the government is encouraging private sector participation in this endeavour. So far, 2 companies have joined the programme and 7 more are in the waiting list.
The launch of Minyakita is an effort to rein in the high price of cooking oil especially in the eastern parts of Indonesia where logistical problems still exist.
Meanwhile, in Malaysia, the government is still maintaining its subsidy for cooking oil with an allocation of RM4 billion (US$898 million) for 2022. The government has assured Malaysians that it will continue to subsidise cooking oil up to 60,000 tonnes per month which it deems as sufficient to meet the needs of Malaysians. The subsidy applies to cooking oil in 1kg polybag packages currently sold at only RM2.50 per packet (US$0.56) for the B40 (low income) households. Its actual market price is RM9 (US$2.02) per kg.
The subsidy was granted as a temporary measure (for 3 months) in August 2021 to help Malaysians cope with the effects of the pandemic. However this has since been extended, but only for non-bottled cooking oil.
Recently, fake news had been circulating that the government will stop supplying 1kg subsidised cooking oil with effect from 1 July. This had resulted in buying frenzy with consumers emptying the supermarket shelves. In addition, some online traders are profiting by reselling the subsidised cooking oil at RM27 (US$6.06) for five 1 litre packets when they are actually sold at only RM12.50 (US$2.80) in the market. The government is investigating.