Edible oil price rises even after VAT cuts

Prices of edible oils, including loose soybean and palm oil, have zoomed up further by Tk 5.0-6.0 a litre in the market, battering commoners amid spiralling prices of other commodities.
The rate of loose soybean has increased to Tk 165-166 a litre and super palm oil to Tk 158-162 a litre.
The prices have witnessed a Tk 10.0-12 hike a litre in the last three weeks since the VAT has been cut by the government, said vendors.
The government has reduced value-added tax (VAT) on import, processing and trading of soybean and palm oils to lower their prices following the demands of refiners and importers.
The finance ministry announced VAT relaxations in import and production stages of edible oils in two separate notifications on October 17.
VAT on local production and trading of soybean and palm oils has been exempted while VAT on refined and crude soybean and palm oils in import stage is also reduced from 15 per cent to 10 per cent.
The government has taken the decision following the requests from the refiners regarding the hike in global oil prices.
The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association urged the commerce ministry that the prices of soybean and palm oil are rising in the international market.
They demanded a 14.8-percent increase in the prices of crude soybean oil and an 18.68-percent rise in the prices of palm oil to cope with the fueling cost.
Later in a meeting with the finance adviser, refiners said they would not raise edible oil prices in local market if the government would reduce import duties.
They also requested removal of all tariffs on local production and trade of edible oils.
In response to these demands, the government decided to grant the tax exemptions.
The government has removed VAT on local production and trading stage while VAT on import has been reduced to 10 per cent from 15 per cent.
Consumers Association of Bangladesh (CAB) vice-president SM Nazer Hossain said that despite the government's efforts to respond to the demands and urgency raised by refiners, they (refiners) are showing a different face.
He said while the government has accommodated their needs, the refiners are engaging in practices that contradict the intended outcomes, failing to pass on the benefits to consumers.
He urged the commerce ministry to look into the matter seriously and pressurise the refiners to reduce the prices of edible oils in loose form to give commoners some relief.
Haider Ali, a wholesaler at Moulvibazar in the city, said cost for per litre soybean from refiners is now Tk 158-160 while they are selling it to retailers at Tk 161-163 a litre.
He also said that the prices of loose oil have increased by Tk 5.0-7.0 a litre in the last three weeks.
Contacted on WhatsApp, City Group director Biswajit Saha said he would answer to the query later.
Asked about the current mill-gate prices, director (finance and operation) of TK Group (Pushti brand) Md Shafiul Ather Taslim did not make any comment until the report is submitted at 8:00pm.
Bangladesh consumes 2.0-2.2 million tonnes of edible oil annually of which it imports above 90 per cent.
Ten refiners of the country dominate the whole edible oil market.

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