THE domestic trade, consumerism and cooperatives minister recently announced that there will be no subsidies for bottled cooking oil but that subsidies for cooking oil sold in 1kg polybags will remain. Cooking oil in polybags will continue to be sold at RM2.50 per kg.
According to the minister, a change in to the Cooking Oil Price Stabilisation Scheme was (COSS) is part of the overall subsidy rationalisation plan. Without the cuts, the government has will need to fork out an additional RM100 million to cover subsidies for this and next month November and December due to escalating global olein (raw palm) oil prices. With the subsidies removed, cooking oil prices will now be based on the market price of palm oil.
This announcement has definitely got consumers riled up consumers, who and the worry is that the removal of the cooking oil subsidy will have a direct impact especially on food prices.
Aggravating the concern is the government’s warning that food sellers are not allowed to buy the subsidised cooking oil, which is sold at RM2.50 for the 1kg packet. This is indeed a genuine concern, if based on previous experiences when sugar and fuel subsidies were similarly removed. Should this be the case? Should food sellers increase prices?
To better understand the situation, the Malaysia Consumers Movement (MCM) (MCM) decided to run a test, working closely with a charitable organisation known as Kembara Kitchen, which is involved in food catering to raise funds for the underprivileged.
We selected a 150 pax catering order with a total billing of RM2,350.00 and decided to run a cost impact analysis. It measured was simply measuring how much cooking oil would be used to prepare the entire order. The order consisted comprised of, amongst others, deep-fried items.
Total cooking oil used for the entire order was 10kg. The increase in cost was approximately RM8 when compared with pre-subsidy price, representing 0.3 per cent of total invoice. When Including delivery cost, for an invoice of RM2,350, the maximum cost increase was approximately RM9.20 (or equivalent to about RM0.06 per head). The question is, does this small percentage justify a 10-20 per cent 10% - 20% increase in food price by restaurant owners and food sellers who identically do mass cooking?
Understandable that sustainability of any business is primarily based on profits, but unscrupulous gains citing awkward justification is plain cheating. The MCM calls on all food vendors in this instance, to act responsibly and do the right thing, and not to take advantage of the situation at hand.
On the other hand While businesses have an obligation to behave ethically, we as consumers have share equal if not a bigger accountability. We Consumers must make a stand and avoid outlets which charge exorbitant prices. We Consumers must also make good use of social media by sharing experiences using available platforms such as Facebook, Instagram, twitter etc. Ultimately, it is us as consumers who that have to be vigilant against unfair price increases and act accordingly. It is of no use to grumble but continue to patronise outlets which we know are operated by unscrupulous traders.
The determining of market prices through the dynamic interaction of supply and demand is the basic building block of any market-based economy. Consumer preferences for a product will determine how much we are willing to pay for it. All of us, consumers and traders alike, must, therefore, strive to create a harmonious ecosystem if we are to collectively benefit.
Pointing fingers at each other will not do any good for anybody.
DARSHAN SINGH DHILLON,
President
Malaysia Consumers Movement (MCM)