A LIQUEFIED petroleum gas (LPG) subsidy programme introduced in 1983 had spouted leakages amounting to RM1.71 billion since 2017, said the Auditor-General’s Report 2018.
 
The programme subsidises cooking gas, which comes in cylinders of 10-14 kg. 

The programme is jointly managed by three agencies –  the Treasury under the Finance Ministry, the Domestic Trade and Consumer Affairs Ministry, and the Customs Department’s tax division.

The leakages sprang from problems with the payments system, enforcement, monitoring and subsidies to ineligible people, the report said.

The National Audit Department noted that the Treasury routinely made payments prior to the Customs Department verifying subsidy claims from supplier companies. The Treasury also did not appear to have a standard operating procedure for the payment of subsidy claims from suppliers.

The department said that from 2015 to 2015, the Treasury paid an excess of RM45.5 million to suppliers while the Customs Department’s verification process took longer than two weeks and in one case, up to 649 days.

Enforcement issues include the Treasury appointing suppliers with no standard agreement or specific procedure. Similar issues were found among suppliers, distributors and retailers, some of which have expired scheduled controlled goods licenses.

The department also noted that wholesale and retail companies failed to keep proper stock records, leaving some companies unable to prove that their premises had been inspected by enforcement officers from Domestic Trade and Consumer Affairs Ministry.  
 
The department recommended that the Finance and the Domestic Trade and Consumer Affairs Ministries set clearer policies and that the Treasury carry out a a full evaluation of the effectiveness of the LNG subsidy programme to ensure that it benefited the target group. – October 15, 2019.