ID system for subsidised cooking oil will come with a hefty price, says economist

An economist has dismissed a proposal to introduce special identification cards for the purchase of subsidised cooking oil while the government scrambles to formulate its proposed targeted subsidy mechanism.

Speaking to MalaysiaNow, Ahmed Razman Abdul Latiff said that the proposal requires further clarification.

"We already have existing identification documents and platforms such as MyKad, MySejahtera, and e-wallets. I fear these special identification cards will involve certain companies and incur significant expenses," Razman of Putra Business School said.

On Oct 2, Deputy Domestic Trade and Cost of Living Minister Fuziah Salleh said the government was considering introducing special identification cards to ensure that only the deserving lot could purchase subsidised cooking oil.

"At present, the government is producing 60 million packets of subsidised cooking oil per month, yet there are complaints about its unavailability in the market and its rapid depletion.

"Many have asked why MyKad or MySejahtera is not being used, but the issue is that the needs of individual families are different from those in microbusinesses," she said in a statement.

Additionally, there have been reports of subsidised cooking oil packets being smuggled across the border to Thailand.

Razman, meanwhile, questioned whether the special identification cards would solve the smuggling or hoarding of cooking oil.

"If it cannot prevent hoarding and smuggling activities, then the use of special identification cards would be pointless.

"Even if consumers possess a special identification card, it proves futile when they visit the store only to discover that everything has been sold out," he added.

Subsidised cooking oil packets are sold at a retail price of RM2.50 per kg.

In June, former domestic trade and cost of living minister Salahudin Ayub announced that the government would introduce a targeted subsidy mechanism for cooking oil in December, with a data repository managed by a single agency to enable subsidies for those in need.

Economy Minister Rafizi Ramli, meanwhile, said the government bore a bulk subsidy of over RM80 billion for fuels such as petrol, diesel, and liquefied petroleum gas, as well as electricity.

Targeted subsidies have become a priority under the government led by Prime Minister Anwar Ibrahim, who does not want the ultra-rich to continue enjoying subsidies. But the implementation framework remains a question to this day.

In November last year, Anwar instructed relevant ministries to complete working papers on targeted subsidies, considering the interests of the people, and emphasised that all government departments must formulate and develop appropriate measures for this purpose.

This came after the public complained of soaring electricity bills despite no significant difference in electricity usage.

Razman, meanwhile, also pointed out that the special identification cards could be misused, just like fake identification cards are sold to foreigners.