The government is considering using the law to forcefully lower oil and ghee prices.

ByShehryar Makhdoom | Published date:
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Price Control and Prevention of Profiteering and Hoarding Act, 1977, is being considered by the government as a possible option to force ghee and cooking oil manufacturers to announce price reductions within the next 48 hours.

According to reliable sources, a shortage of ghee and cooking oil will occur soon because importers have halted the clearance of all shipments of imported edible oil. At the same time, they await notifications from FBR regarding reduced duties and taxes on edible oil imports following Monday's announcement by Minister for Planning and Development, Asad Umar.

Unnamed government officials stated in the absence of FBR notifications on reduced customs and taxes on edible oil imports. The industry urged to reduce prices within the next 48 hours.

Ghee and cooking oil costs would be lowered by this action, which comes even though the Federal Board of Revenue (FBR) has not issued SROs for any reductions in levies and taxes, as Minister for Planning and Development Asad Umar revealed on Monday.

The decrease in sales tax, customs duty, and extra customs duty (ADC) on edible oil imports announced by Asad Umer will not be implemented until the Federal Reserve Board notices that effect.

According to the FBR's announcements, this would only apply to future imports and clearances of edible oil. To avoid depleting existing supplies of ghee and cooking oil on the market, we must not implement this reduction. The industry is unable to lower the price of ghee and cooking oil due to scarcity of supply.

Clearance of shipments at lower duty and tax rates is only possible following the FBR issuing SROs. Will sell existing ghee and cooking oil goods on the market at their current prices because these commodities have consumed edible oil at higher duty and tax rates applicable to previously approved consignments.

According to reports, the Ministry of Industries and Production is preparing to use the Price Control and Prevention of Profiteering and Hoarding Act, 1977, even though edible oil has risen significantly on the world market. For this reason, the Ministry of Finance has issued a warning to the industry that it must complete its final work within the next 48 hours to prevent receiving news of the price drop.

If you believe Asad Umer, the international price of edible oil has climbed by 48 percent, then the cost of that product on the local market has increased by 38 percent. However, the industry believes that Asad Umer's statement supports the sector's claim that producers have passed on relief above landed cost.

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