Simple answer: yes, cooking oil is food, regardless of its packaging. I don't buy Pam, though - I just put olive oil in a spray bottle specifically designed for olive oil (regular spray bottles won't work), and then you can get just the oil without all the additives in Pam.
More complete answer: I don't know why anyone would feel the need to drill down below the "grocery store" level when budgeting. Food, paper products, diapers, toiletries, beer, etc. all get categorized as "groceries" in our budget.