Syndicates have shifted tactics in the subsidised cooking oil trade, now selling unused oil as “used” recycled oil to processing plants to make quick profits.
The Domestic Trade and Cost of Living Ministry recently uncovered this scheme, in which clear, unused 1kg subsidised oil packets are sold to recycling wholesalers or factories. The new tactic was identified after months of intelligence gathering, according to a ministry source.
On Wednesday, Penang Domestic Trade and Cost of Living Ministry officers raided a poultry farm in Sungai Bakap, which was being used as a transit point. A local man in his 40s and a Myanmar national were detained.
Investigations revealed that the syndicate had been operating for two years, obtaining 1kg subsidised polybags from wholesalers and transporting at least one tonne of oil to the farm daily. The suspects would open the packets and transfer the contents into large drums, which were then delivered to a used cooking oil collection centre in Jawi, Seberang Perai, where the oil was sold as “used.”
The collection centres reportedly buy the oil at about RM4 per kg, while subsidised oil costs RM2.50 per kg, giving the syndicate a profit of RM1.50 per kg. Authorities estimate the group diverts nearly 30 tonnes of subsidised oil each month, generating approximately RM30,000 in monthly profits.
This method avoids the risks of cross-border smuggling or selling directly to industries, as the oil is disguised as a waste product.
In a separate raid on Wednesday, the ministry also dismantled a syndicate selling subsidised oil to local restaurants. State director S. Jegan said the group used a rented house as a storage site to collect supplies from wholesalers and retailers every two weeks, decanting the oil into large tanks and reselling it to eateries at RM4 per kg.
Both cases are being investigated under Section 21 of the Control of Supplies Act 1961 for possession of controlled goods with intent to commit an offence.
