The Domestic Trade and Cost of Living Ministry has committed to carefully examining recommendations from Parliament's Public Accounts Committee regarding the administration of cooking oil price controls and subsidy arrangements. Minister Datuk Armizan Mohd Ali confirmed the ministry's willingness to engage with the committee's findings, which were presented to the Dewan Rakyat on 16 July in PAC Report DR. 27 of 2026, signalling a government response to parliamentary scrutiny of one of Malaysia's most significant consumer subsidies.
Central to the ministry's strategy is accelerating the rollout of eCOSS, the Cooking Oil Stabilisation Scheme System, a digital platform designed to track and control the distribution of subsidised cooking oil throughout the supply chain. Development of this technology commenced in 2023, and the ministry is now executing a two-pronged expansion plan. The first phase involves systematically enforcing the digital system across all participants in the cooking oil supply chain, while the second focuses on extending accessibility through a mobile application launched in pilot form during May 2025. This technological approach represents a fundamental shift from manual record-keeping, which historically created vulnerabilities to manipulation and diversion of subsidised supplies to unintended recipients.
Minister Armizan emphasised that the complete deployment of eCOSS constitutes a critical risk management initiative aimed at eliminating leakages within the subsidy system. By replacing paper-based documentation with digital verification processes, the ministry aims to prevent the misappropriation of cooking oil supplies and close administrative loopholes that previously allowed subsidised products to be diverted for profit. The integrity of the subsidy system has long been a concern for policymakers, as leakages not only inflate government expenditure but also undermine the equity principle underlying the subsidy—that assistance reaches genuinely needy households rather than speculators or those who can afford market prices.
A significant enhancement to the eCOSS framework will involve integration with Malaysia's National Registration Department's new identity card system. This technological partnership will enable users to authenticate their eligibility for subsidised cooking oil purchases through QR code scanning rather than manual verification. This mechanism is particularly important given the ministry's stated objective of preventing foreign nationals from accessing subsidised supplies, a longstanding challenge in Malaysia where migrant workers and undocumented immigrants have sometimes obtained subsidised goods intended exclusively for Malaysian citizens. By tightening verification procedures through identity-linked digital authentication, the ministry aims to ensure that scarce subsidy resources are allocated only to eligible domestic consumers.
The PAC's recommendations extended beyond technological solutions to address structural concerns about market concentration in Malaysia's cooking oil refining sector. The committee suggested that the ministry should redistribute refining quotas in ways that reduce the dominance of foreign-owned enterprises and strengthen the position of local, competitively managed companies. This recommendation touches upon a sensitive issue in Malaysia's food security strategy, as cooking oil refining capacity and import dependency remain strategically important matters. Currently, the government has not formally allocated refining quotas since the original Cooking Oil Stabilisation Scheme was introduced; instead, repackers independently select suppliers based on practical considerations such as transportation costs, credit availability, price competitiveness, and supply reliability.
Acknowledging the PAC's perspective, KPDN indicated that it is now implementing phased interventions to encourage repackers to source supplies preferentially from Malaysian-owned refineries. These measures include imposing quota replacement requirements that effectively channel a portion of procurement toward local producers and establishing business-matching mechanisms that facilitate direct engagement between domestic refiners and repackaging companies. While stopping short of imposing mandatory quota allocations—which could disrupt efficient supply chains—the ministry is using incentive structures to gradually shift purchasing patterns toward local ownership. This nuanced approach reflects the tension between achieving targeted policy objectives and maintaining the operational efficiency necessary for stable consumer prices.
Additional safeguards introduced to strengthen the scheme include prohibiting the sale of one-kilogramme cooking oil packets to foreign nationals, a measure designed to prevent subsidy leakage to non-eligible buyers while maintaining availability for Malaysian households. Furthermore, the ministry is integrating eCOSS with the Sumbangan Asas Rahmah system, which administers other targeted government assistance programmes. This integration should improve the overall targeting efficiency across multiple subsidy schemes and reduce administrative redundancy. The ministry has also committed to streamlining enforcement operations, concentrating oversight efforts on the highest-risk points in the supply chain where historical leakages have been most prevalent.
Minister Armizan noted that KPDN's review process draws upon multiple sources of institutional feedback and oversight. Internal departmental reviews, combined with audit findings from the National Audit Department issued in July 2025 and the recently presented PAC report, provide a comprehensive assessment of the scheme's performance and vulnerabilities. This layered approach to evaluation reflects international best practices in subsidy administration, where multiple independent oversight bodies cross-check the effectiveness of support programmes. The convergence of findings from internal auditors, external auditors, and parliamentary committees creates pressure for genuine reform and provides multiple accountability mechanisms.
Looking forward, the ministry expressed confidence that the PAC and other stakeholders would continue supporting the strategic initiatives being undertaken to enhance the scheme's effectiveness. Implicit in this appeal is an acknowledgement that subsidy scheme reform requires sustained political and bureaucratic commitment beyond the initial announcement phase. The statement also indicated KPDN's intention to pursue strict enforcement actions against all participants in the cooking oil supply chain—including refinery operators, repackers, wholesalers, and retailers—found to have violated regulations. This emphasis on comprehensive compliance suggests that the ministry recognises that technological systems alone cannot eliminate leakages without matching commitment to investigating and penalising wrongdoing.
For Malaysian consumers and policymakers, these developments represent an effort to preserve the affordability benefits of cooking oil subsidies while addressing long-standing concerns about programme integrity and cost escalation. As food inflation remains a politically sensitive issue across Southeast Asia, Malaysia's approach to improving subsidy targeting through digital systems and supply-chain interventions may serve as a reference point for other governments wrestling with similar challenges. The interplay between technological solutions, market structure adjustments, and regulatory enforcement that KPDN is pursuing reflects a sophisticated understanding that subsidy sustainability requires attention to multiple dimensions simultaneously.
