What is the financial incentive behind cooking oil misappropriation?

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Financial incentives drive the misappropriation of subsidised cooking oil.

The financial incentive behind the misappropriation of subsidised cooking oil stems from the significant price difference between subsidised oil and processed used cooking oil destined for the biodiesel industry. This disparity creates a profitable opportunity for unscrupulous parties to divert subsidised supplies for illicit reprocessing and sale.
Higher profits from used cooking oil for biodiesel

Used cooking oil, when processed for the biodiesel industry, commands a substantially higher market price than subsidised cooking oil. Available information indicates that used cooking oil can fetch prices up to RM4.20 per kilogramme (kg). In contrast, subsidised cooking oil is priced at RM2.50 per kg. This substantial difference incentivises the adulteration and resale of subsidised oil.
Syndicate profits from mixing used and subsidised oil

Irresponsible individuals and groups exploit this price gap by mixing subsidised cooking oil with used cooking oil. This mixture is then sold to biodiesel processing companies, generating illicit profits. For instance, the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) in Johor recently busted a syndicate in Pasir Gudang that was engaged in this practice, seizing 13.6 tonnes of adulterated cooking oil.
Diversion of subsidised oil for profit

The government allocates a substantial 60 million kg of subsidised cooking oil monthly for public consumption. However, shortages persist because this subsidised supply is being diverted and mixed with used cooking oil by those seeking to profit from the price differential. This misappropriation directly contributes to the scarcity experienced by consumers.

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What is the financial incentive behind cooking oil misappropriation?

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