The government has reprimanded companies for the high prices of edible oil i.e. cooking oil in the retail market. Not only this, the government on Friday also sought clear answers from companies in this regard. The government says that when the import duty on cooking oil in the country has been reduced. The quantity of cooking oil being imported into the country with low duty is also sufficient, then why are its prices still so high in the retail market?
The government had already advised companies to stabilise prices of imported cooking oil with low import duties, based on adequate availability. It was also asked to take all necessary measures for this. Despite this, its prices remain high in the country.
There are 50 days of oil left in the country
The Food Ministry says that the stocks of imported cooking oil in the country with low import duty can still comfortably last for 45-50 days. In such a situation, food processing units should avoid raising prices. Moreover, the price increase comes at a time when the festive season is about to begin in the country and the demand for cooking oil is set to increase.
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Recently, Food Secretary Sanjeev Chopra held a meeting with representatives of Solvent Extraction Association of India (SEA), Indian Vegetable Oil Producers Association (IVPA) and Soybean Oil Producers Association (SOPA) to discuss the pricing strategy. According to a government statement, all oil producers have been asked to keep prices low as long as imported oil at cheap import duty is available in the country.
India imports edible oil in large quantities to meet its domestic demand. The dependence on imports is more than 50 per cent of the total requirement. Currently, 30 lakh tonnes of cooking oil is imported into the country at zero per cent and 12.5 per cent basic customs duty (BCD). This is sufficient to meet the demand for the next 45 to 50 days.
The government has again raised import duties
Recently, on September 14, the Central Government increased customs duty on import of various edible oils to support domestic oilseed prices. Subsequently, on September 17, the Ministry of Food convened a meeting to ensure that there is no increase in the retail price of oil.
The government has now increased the basic customs duty on crude soybean oil, crude palm oil and crude sunflower oil from zero to 20 percent. With this, the effective duty on crude oil has now become 27.5 percent. The new tariff will come into effect on September 14, 2024. In addition, the basic customs duty on refined palm oil, refined sunflower oil and refined soybean oil has been increased from 12.5 percent to 32.5 percent. With this, the effective duty on refined oils has now become 35.75 percent.
