The great Malaysian cooking oil arbitrage

karlsnotes.com

18 pointsvalkrieco2 comments

Thinking from the position of the government that is subsidizing the oil and this losing money to the fraudsters, if wonder what a good course of action could be?

- Adding a tax on used oil sold? Might drive the industry away and hurt the small restaurants in the long run.

- Set subsidized price to be equal to what the buyback price for the aviation fuel is, taking away the arbitrage?

Do nothing? Acknowledge that the Lord did to this is going back into the community and not concentrated to a select fee individuals?

And other policy move that they could do?

The government could run an exchange program instead: The cheap (subsidized) fresh oil price only applies when people are simultaneously selling an equivalent amount of used oil. The government then ensures the used oil is liquidated at a competitive price.

Real establishments would periodically swap some old containers of used oil for new stock, while fraudsters trying to arbitrage would struggle to acquire cheap old oil from some other source.

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