Citing the expiration of a VAT cut, edible oil refiners want to increase the price of bottled soybean oil by Tk 18 to Tk 205 per litre from today (Wednesday) - at a time when the global prices declined to a twelve-month low.
The Bangladesh Vegetable Oil Refiners and Vanaspati Manufactures Association recently sent a letter to the commerce ministry, seeking the price adjustment for soybean and palm oil.
Commerce ministry officials said they will hold a meeting with sugar and edible oil refiners today (Wednesday) to reach a decision.
The government in March last year lowered the value-added tax (VAT) on edible oils at the import and refining stages. The facility expired on April 30.
Under the exemption, the refiners paid 5.0 per cent VAT instead of 15 per cent at the import level while it was zero at the production stage which previously was 15 per cent.
If the VAT cut is not extended, one litre of bottled soybean oil will be at Tk 205 from the current Tk 187, while five litres of soybean will be at Tk 1,005 from the current Tk 930, according to the refiners.
According to the new rate, the palm oil price will be at Tk 129 per litre from the current Tk 121.
However, edible oil distributors have claimed that representatives of the refiners have already informed them to raise the prices.
A cooking oil distributor in Dhaka's Mohammapdur said refiners did not issue new delivery orders (DOs) after Eid, as the company representatives have verbally informed them about the price jump.
Consumers Association of Bangladesh (CAB) vice president SM Nazer Hossain said he was surprised by the activities of both the government and the refiners.
"How could the refiners raise prices in minutes after the end of the VAT exemption as the products they would sale at higher prices were brought or already been refined under the immunity?" he said.
"And why the government is not willing to continue the VAT exemption facility during a time when people are in a most difficult condition amid a rocketing trend of essentials," he said.
He said the government will have to take stern action against refiners if they raise prices without the go-ahead from the authorities.
He said global soybean oil prices declined to a one-year low in April to US $ 1130-1150 a tonne which should also be taken into consideration.
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