KUALA LUMPUR (Aug 1): The government on Monday (Aug 1) decided the pricing mechanism for 5kg bottles of palm cooking oil will be determined every month, with the price for August set at RM34.70 per bottle.

Special Task Force on Jihad Against Inflation Chairman Tan Sri Annuar Musa said the sale price will come into effect on Aug 8, and that the price of palm cooking oil will be set monthly based on the previous month's crude palm oil (CPO) price. The previous month's CPO price will be announced by the Malaysian Palm Oil Board (MPOB) on the 1st of the following month.

"MPOB will announce the price of [CPO for] the previous month, and that price will be the benchmark to determine the retail price of pure palm cooking oil sold without subsidy.

"MPOB has informed that the average price of CPO for July was at RM4,063 per metric ton. Based on that price, the selling price of cooking oil in 5kg bottles [will] be set at RM34.70 [for August]," he said at a press conference after chairing the Special Task Force on Jihad Against Inflation at the Parliament building on Monday (Aug 1).

The price of RM34.70 set for 5kg bottles of cooking oil is only for Peninsular Malaysia, excluding Sabah and Sarawak. A table will also be announced to include the price for 3kg bottles.

Regarding how the price mechanism works, Annuar noted that a calculation method will be determined by the Ministry of Domestic Trade and Consumer Affairs after MPOB declares the monthly CPO price.

According to Annuar, the Ministry of Domestic Trade and Consumer Affairs and industry players have negotiated a pricing schedule that will ensure industry players are still able to make sufficient profit margins under the monthly pricing mechanism.

He expects the same method of determining the ceiling price of non-subsidised cooking oil to be maintained in the coming months.

Annuar, who is also Communications and Multimedia Minister, added that enforcement in stores at the retail level shall begin seven days from the date it is announced.

"Starting from Aug 8, 5kg cooking oil [bottles,] currently sold at a price of approximately RM39 to RM42, should be sold at a maximum price of RM34.70.

"Retail outlets will have [a grace period of one week] to comply with the new maximum pricing. They can sell lower but the maximum price for 5kg cooking oil [bottles] must not be more than RM34.70," he said.

According to the Ketereh Member of Parliament, MPOB has made the commitment to announce the average CPO price for the previous month and from that price, the Ministry of Domestic Trade and Consumer Affairs will calculate the maximum control price for non-subsidised cooking oil.

"This method is to make sure that when CPO price goes up, [we] won't raise the cooking oil price too quickly, and when the CPO price goes down, [we] won't be too slow to lower the cooking oil price.

"This happened in the past. So with this method agreed upon by the industry, every increase or decrease in the CPO price must be reflected in the retail price as soon as possible, in this case one month after the official price is announced," he said.

Since July 1, Putrajaya has ceased subsidies for palm cooking oil of 2kg, 3kg and 5kg bottles. However, the government has continued to subsidise 1kg cooking oil packs, which are packaged in polybags and priced at RM2.50 each.