The 2015 Auditor-General’s Report Series 2 has recommended that the Ministry of Plantation Industries and Commodities to monitor and control cooking oil constantly as a way to to prevent distribution abuse or leakages.
In the report also advised that the National Blue Ocean Strategy should be established in collaboration with the Ministry of Domestic Trade, Cooperatives and Consumerism to help the monitoring at the retail stage.
The government had to pay an extra RM2.92 million in subsidies because of weaknesses in the management of Cooking Oil Stabilisation Scheme (COSS).
The report highlighted that from 2013 to April 2016 was RM2.388 billion was paid by the government.
The report also suggested that 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,” it 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 at April 2016, 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 RM2.92 million,” said the report.
The Ministry of Plantation Industries and Commodities implemented COSS due to the higher crude palm oil prices in the second quarter of 2006 and early 2007. It is is a funding scheme to subsidise refineries on a monthly basis to keep prices down for consumers.
“As of April 2016, the ministry had approved monthly cooking oil quota amounting to 82,169 tonnes for 25 refineries and 241 packaging companies.
“The total subsidy paid for the period from 2013 to April 2016 was RM2.388 billion,” the report said.