Government steps in with RM15m monthly subsidy as palm oil costs rise

KUALA LUMPUR, Nov 11 — In response to a spike in global crude palm oil (CPO) prices, the Malaysian government has launched a RM15 million monthly subsidy under the Cooking Oil Price Control Mechanism (MKHMM) to help maintain stable ceiling prices for bottled pure palm cooking oil. Speaking at a media conference following the Cabinet meeting on Nov 6, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali explained that this intervention aimed to prevent a sharp rise in production costs that could lead to production halts by manufacturers.

Armizan highlighted that if global CPO prices had remained as high as the average RM4,400 per tonne recorded in October 2026, the cost of a 5kg bottle of cooking oil could have escalated to RM34 without this government support. The government's mechanism, stipulated under the Price Control and Anti-Profiteering Act 2011, will keep the ceiling prices at RM6.90 for 1kg, RM13.30 for 2kg, RM19.60 for 3kg, and RM30.90 for 5kg bottles of pure palm cooking oil.

The prolonged increase in global CPO prices since June 2025 has exacerbated cost pressures on manufacturers, some of which have been forced to suspend bottled cooking oil production. The Ministry of Domestic Trade and Cost of Living has collaborated with the Finance Ministry and other related bodies to implement this incentive as part of a broader effort to alleviate cost-of-living pressures caused by the ongoing conflict in West Asia.

Commenting on the development, PRESMA president Datuk Mohammed Mosin Abdul Razak expressed optimism that the stable cooking oil prices would assist restaurant operators in managing their business costs more effectively. He also suggested that the government might consider offering targeted subsidies to restaurant operators, drawing a parallel to the support previously extended to manufacturers.