HANKY-PANKY IN SUBSIDIES: CAN 9 MILLION 5KG BOTTLES OF COOKING OIL WALK ACROSS THE BORDER BY THEMSELVES WITHOUT DETECTION?

A FEW years ago, a petrol station owner on the outskirts of Kuala Lumpur was ordering a tanker of diesel a day. That was about 38,000 litres. It should have prompted the raising of a red flag, but the petroleum company fulfilled the orders.

It wasn’t until a raid carried out by the then Domestic Trade and Consumer Affairs Ministry that discovered most of the diesel ended up in factories and used for commercial operations.

The diesel subsidy was only for domestic use and when the supplies and sales were tallied, an estimated over two million litres had ended up in the wrong hands over a nine-month period.

Subsequently, subsidised diesel was seized by the tanker loads and it was unknown if the perpetrators were either apprehended or prosecuted.

Today, the subsidy on cooking oil has been taken away, leaving consumers to foot the entire cost – if they buy it in a 5kg packaging. But before that, one startling fact: Local manufacturers produce 85,000 tonnes of cooking oil, which is subsidised by the government. But the domestic consumption is only 40,000 tonnes.

So, where does the other 45,000 tonnes go? They end up across the border in the North, which means the government is spending RM450 million annually in subsidising consumers in two countries.

This begs the question: What is happening at our border checkpoints? The authorities are quick to call for a media conference when they seize small quantities of rice and other goods. But how does 45,000 tonnes or about nine million 5kg-bottles cross the border?

Often, we are told about a porous border, which has allowed human trafficking and smuggling. But never, in anyone’s wildest imagination, would 4.5 million people be walking across the border with 5kg of oil in each hand!

On Friday, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainudin announced the removal of subsidies for the 5kg packaging, which the government envisaged would be no longer profitable to smuggle out of the country.

However, the cooking oil subsidy will be maintained only for oil packed in 1kg polythene bags, which is supposed to be a good move in providing targeted subsidies to the needy.

The ministry may feel that it has made it more difficult for smugglers to profit from government subsidies and saving the government millions. But as they say, where there’s a will, there’s a way. What is going to prevent smuggling syndicates and their ingenuity and connivance with other authorities to smuggle these polythene bags?

Talking about subsidies, I was waiting for my appointment with the doctor last week when I noticed a lorry delivering Liquefied Petroleum Gas (LPG) or, simply put, cooking gas to a nearby restaurant. I counted 38 cylinders of 12kg being delivered.

Of course, cooking gas too is subsidised. A 12kg cylinder for domestic use costs RM26.60 but a 50kg cylinder for industrial use costs RM178.

My question is: Should restaurants enjoy the perks of being able to use subsidised cooking gas for their business? If subsidy is meant for the individual, why should bodies corporate and commercial ventures benefit?

Herein lies the problem of integrity or rather the lack of it in various sectors of the government. From procurement of goods and services to disbursement of subsidies, there has been hanky-panky going on. I am not picking this out of thin air. The number of cases on these issues reported in the media attest to this assertion.

Here’s some food for thought: If the government was aware that local consumption was only 40,000 tonnes, shouldn’t its antennas have gone up when it was subsidising for 85,000 tonnes? Shouldn’t someone have asked: “Where the hell is the extra going to?”

The whole supply chain can be easily monitored to prevent any abuse. Shouldn’t the manufacturers be asked to provide the names of wholesalers and the quantity they are supplying? And in turn, shouldn’t the wholesalers have a list of whom they supply to? Shouldn’t retailers be asked to provide their sales documents including invoices and receipts?

If a small kedai runcit is buying cooking oil by the tonnes every month when it has just a small clientele in the rural areas, shouldn’t the alarm bells be ringing? But some people in authority pretend to be deaf – and dumb too! But then again, there’s this Malaysian malaise – tutup satu mata!

WRITER R. Nadeswaran has no qualms if subsidies are given to the right people but he cannot stomach the irregularities and money-making schemes attached to them

THE SUNDAILY