Refiners contradict BTC suggestions on oil prices

Edible oil refiners contradicted on Wednesday the price recommendations made earlier by the state-run Bangladesh Tariff Commission (BTC).
Representatives of Bangladesh Edible Oil Refiners Association (BEORA) including Meghna Group, TK Group, City Group and S Alam Group met the BTC chairman on the day and placed their objections.
Biswajit Saha, general manager of City Group that markets the 'Teer' brand oil, said the BTC did not talk to the refiners' association before placing the report containing the recommendations.
He said the Bangladesh Bank (BB) did the estimation on edible oil's import price excluding the shipment cost.
If the shipment cost of at least $ 60 per tonne is taken into account, the BTC-recommended price would increase by Tk 4.8 per litre.
He said loose soybean was being sold at Tk 69-70 per litre at mill gates and one litre of bottled oil Tk 88 at the manufacturing level.
The edible oil market is very stable, now thanks to positive trends in the global market. The price of oil is much lower at the retail level now compared to that of last year, he told the FE.
He emphasised increased monitoring to minimise the gap between wholesale and retail prices.
The BTC in its latest analysis, sent to the Ministry of Commerce last week, recommended that the maximum retail prices (MRP) of loose soybean oil should be Tk 67.10 per litre, one litre of bottled soybean oil Tk 82, five-litre bottled oil below Tk 400 and super palm Tk 58 per litre, according to the commerce ministry officials.
According to the Trading Corporation of Bangladesh (TCB) data, edible oil including soybean and super palm was being sold at prices higher by 19-20 per cent than the BTC-recommended levels.
However, according to the global commodity portal IndexMundi, soybean (crude) prices are hovering between $700-716 per tonne and palm oil $600-624 per tonne for the last six months.
BTC chairman Dr Md Azizur Rahman told the FE: "The commission thinks there is a need to review the recommendations".
He said the recommendations were made on the basis of costing formula of the fiscal year 2010-11.
He said the C&F price, premium of insurance, taxes, gas etc might have increased or declined over the last few years.
"We don't find any rationale behind review of the costs of the companies as the market was stable in the last few years".
 "Both the government and the private sector earlier thought that reviewing costs of the companies might affect the market," he said.
But the chairman reminded the FE that the BTC was nobody to fix prices; the commission just conveyed its observations to the ministry.
The commission chairman also said that after the review by the BTC, the recommended price might increase by 2.0-5.0 per cent.
On review of the recommendations by the BTC, one litre of loose soybean oil will not cost more than Tk 74.55. It is now selling at Tk 80-84 per litre, according to a TCB official.
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