Audit report: Government overpaid LPG subsidies by RM1.7b from 2015 to 2017

Audit report: Government overpaid LPG subsidies by RM1.7b from 2015 to 2017

KOTA KINABALU,. Almost RM1.717 billion was spent by the government on subsidies for liquefied petroleum gas in 2015 to 2017, but on the wrong user group.

The 2018 Auditor-General’s report Series 1 revealed that the government subsidies, which were meant for domestic consumers, had been used by commercial users such as laundromats and eateries for their daily operations.

“Generally, the target group to receive such subsidies are domestic users who can buy LPG at a lower rate, but a weakness in the SOP for monitoring and enforcement has seen the subsidies being taken advantage of,” said the report.

The Audit’s analysis showed that the actual amount of subsidies was RM730.08 million in 2015, RM676.08 for 2016 and RM1.285 billion for 2017. But the accounts showed that the actual payout was far higher at RM1.245 billion in 2015, RM1.094 billion in 2016 and RM2.069 billion in 2017.

“So, from the total of RM4.409 billion subsidies that was spent from 2015 to 2017, some RM1.717 billion or 38.9 per cent was a result of leakages to non-qualified consumers,” said the report.

It also said that the Treasury has no specific SOP on paying claims from suppliers of LPGs, causing an issue with an overpayment amounting to RM45.5 million from 2015 to 2017

The management of subsidies falls under the purview of the Treasury, Domestic Trade and Consumer Affairs Ministry and Royal Malaysian Customs.

The Treasury is responsible for determining the policy and the monthly subsidy rate in accordance to market prices. It is also in charge of paying out subsidies to the five suppliers.