Butter is a saturated compound while cooking oil is an unsaturated compound. Unsaturated compounds are oxidized by alkaline potassium permanganate with the disappearance of its pink colour. When cooking oil is treated with a few drops of Alkaline KMnO₄ solution the pink colour of KMnO₄ disappears. However pink colour of KMnO₄ does not disappear when treated with butter. Additional Information We can also distinguish chemically between cooking oil and butter by the bromine water test. An alkene will turn brown bromine water colourless as the bromine reacts with the carbon-carbon double bond. C₂H₄(g) + Br₂(aq)(Brown) → C₂H₄Br₂(aq)(Colourless) Cooking oil decolourises bromine water showing that it is an unsaturated compound while butter does not decolourise bromine water.