Prices of edible oil and ghee are less likely to come down not only because of technical reasons but also due to lack of regulatory oversight.
The Pakistan Vanaspati Ghee and Oil Manufacturers Association (PVMA) has through a letter to the ministries of industries and finance informed that ghee and edible oil prices cannot be reduced because of high palm oil prices and the continuous depreciation of the rupee.
However, the PVMA suggested to the government to reduce the new taxes imposed on ghee and oil in the 2021-22 budget and enforce its regulatory authority on the retailers who were fleecing the consumers.
Prices of edible oil the international market closed at $1,225 per tonne on Friday, with an increase of around $50 against the previous month.
“Besides, around $40 per tonne was incurred as freight charges, etc, while the Pakistani currency has declined to around Rs168 against the dollar,” PVMA chairman Sheikh Abdul Waheed said while talking to media here on Saturday.
He said the government had promised to take back the additional duties imposed on ghee and oil in the current financial year’s budget but that promise had yet to be honoured.
An additional sales tax of 3 per cent was imposed in the 2021-22 budget on the sale of ghee and cooking oil to unregistered buyers, including wholesalers and retailers, while 0.1pc and 0.5pc withholding tax, along with input sales tax adjustment of up to 90pc had also been levied.
Finance Minister Shaukat Tarin had directed the PVMA last month to reduce the prices of branded and unbranded ghee/cooking oil to around Rs270-300 per kg, but different brands of these commodities are selling currently in the range of Rs330 to Rs400.
The PVMA maintains that the average monthly consumption of ghee and oil in Pakistan was around 400,000 tonnes and 350,000 tonnes was produced in the organised sector mainly through imported raw material and the remaining demand is filled by locally-grown oil seeds and the unorganised sector.
The demand for palm oil and palm olein was increasing in the international market, as it has several applications, including cooking, lubricants, candle-making, cosmetics and even for making biofuel.