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Edible oil becomes cheaper: Government reduces import duty, companies instructed to reduce MRP
The government has reduced customs duty on crude sunflower, soybean, and palm oil from 20% to 10%. This is expected to make edible oil cheaper. The department has instructed the companies to immediately reduce the MRP and pass on the benefit to consumers. A weekly report of prices has also been sought.
The basic customs duty, i.e., BCD, on edible oils has been cut by 50 percent. The crude sunflower, soybean, and palm oil's duty has been brought down from 20 percent to 10 percent. This decision has led to the rise in the difference in import duty between the crude and refined edible oils from 8.75% to 19.25%. The companies have been directed by the government to pass on this advantage to the consumers at the earliest.
There has been a meeting with the leading associations and stakeholders from the edible oil industry under the chairmanship of the Department of Food and Public Distribution Secretary. They were asked in this meeting to extend the benefit gained due to the reduction in duties to the consumers. The department said in a statement, both the price and the maximum retail price for distributors should be adjusted.
The department asked the oil associations to advise them to implement the price reduction immediately. Also, share brand-wise updated MRP sheets with the department on a weekly basis. The ministry has shared a format for reporting MRP with the edible oil industry. It stressed that it is necessary to pass on the benefits through the supply chain in a timely manner so that consumers can also get a similar reduction in retail prices.
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On May 31, the government had cut import duty on palm oil, crude soybean oil, and crude sunflower oil by 50 per cent to 20 to 10 per cent. Officials said the difference of 19.25 per cent duty will help encourage domestic refining capacity utilization and reduce imports of refined oils.
The prices of cooking oils have increased by 25 per cent in a year. According to the Ministry of Consumer Affairs, the price of vegetable oil was Rs 155 a liter on Wednesday, which was Rs 126 a year ago. Similarly, the price of soya oil increased from Rs 123 to Rs 147, the price of sunflower oil increased from Rs 123 to Rs 160 per liter, the price of palm oil increased from Rs 100 to Rs 132, and the price of mustard oil increased from Rs 138 to Rs 172. However, in some cities, their prices are even higher. However, in recent months, they have increased by up to 17 percent.
