Refiners want market-determined edible oil pricing mechanism

Local refiners have sought withdrawal of the existing government intervention in fixing edible oil prices and allow the sector to operate under a market-based pricing mechanism.
According to them, the existing administrative price controls disrupt supply security and discourage investment in the country's edible oil sector.
To protect the interests of both traders and consumers, the Bangladesh Vegetable Oil Refiners' and Vanaspati Manufacturers' Association (BVORVMA) has submitted a five-point comprehensive proposal to the commerce ministry, urging the government to shift the existing pricing framework to an open-market economic model under strict monitoring by the authorities.
According to an official document, a stakeholder meeting on June 21 last decided in principle to shift the existing pricing model over to an open-market economic framework.
Under the proposed framework, the association suggested that local edible oil prices should be determined based on the international benchmark prices, particularly the Chicago Board of Trade (CBOT), along with LC costs, in-bond and ex-bond expenses.
The prices could later be verified by the Bangladesh Trade and Tariff Commission (BTTC), according to the proposal.
The refiners also proposed setting up a Central Monitoring Cell under the BTTC to oversee the overall market situation.
All refiners would submit necessary market-related information directly to the cell, while government agencies seeking data would collect it through the Ministry of Commerce to avoid duplication and inconsistencies.
They also suggested introducing a real-time digital dashboard to monitor the rationality and transparency of pricing decisions.
The BVORVMA said it is willing to bear the development and operational costs of such a system if deemed necessary by the ministry.
Pending full transition to a market-based pricing system, the association proposed that importers, refiners and distributors would continue to fix maximum mill-gate, wholesale and retail prices in line with the Essential Commodities Marketing and Distributor Appointment Order, 2011, while informing the authorities before implementation.
The association argued that administrative price fixing failed to reflect global market realities.
It further said the local importers and refiners incur significant losses when international prices rise sharply but domestic prices remain capped, discouraging fresh investment and increasing business risks.
According to the refiners, a competitive open market would automatically balance prices through competition among multiple suppliers, protecting consumers without direct administrative intervention.
The association finally urged the government to focus on strong market monitoring and policy support instead of directly fixing prices, saying such an approach would help ensure long-term supply stability and a healthy competitive market environment.
Currently, both the commerce ministry and BVORVMA fix the prices of edible oil prices, if needed.
When contacted, a relevant official of the commerce ministry said: "We have received a proposal (from the association) and it is now under scrutiny."

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