Economist urges caution on cooking oil subsidy removal without safety net

An economist has cautioned against removing Malaysia's cooking oil subsidy without first ensuring that alternative support systems are working properly to protect lower-income households.

Ahmed Razman Abdul Latiff said the 1kg cooking oil subsidy should remain in place until targeted aid mechanisms have demonstrated their ability to safeguard vulnerable populations from potential hardship.

The economist's remarks come as policymakers weigh options to reform Malaysia's subsidy framework. While the government has signalled its intention to shift toward more targeted assistance programmes, concerns persist about whether such systems can be implemented effectively without leaving gaps in coverage.

The cooking oil subsidy has long been viewed as a direct support measure for lower and middle-income Malaysians, with the 1kg packet size considered particularly important for household budgets. Any phase-out would need to be carefully calibrated to prevent price shocks, Latiff suggested.

The debate highlights the broader challenge facing Malaysian authorities in balancing fiscal sustainability with social protection, particularly as the country navigates ongoing inflation concerns and cost-of-living pressures for ordinary households.