Tarin warns ghee, cooking oil makers to cut down prices

ISLAMABAD: Federal Minister for Finance Shaukat Tarin on Monday warned the manufacturers to rationalise domestic ghee/cooking oil prices in line with easing international vegetable oil markets.

Tarin said this during a meeting with a delegation of Pakistan Vanaspati Manufacturers Association (PVMA) at his office, according to an official statement by the Ministry of Finance. Tarin made it clear to the PVMA officials the government would take all-out measures including flooding the market with imported edible fats if prices were not brought down in the domestic market.

There was a heated discussion on price range and the government circles stressed the branded and unbranded ghee/cooking oil prices must be reduced to around Rs270-300/kg in the domestic market for different branded products. The PVMA representatives argued the prices were linked to international market as palm oil was being imported largely from Malaysia so it was not in their hands alone to bring down the prices.

The price of branded cooking oil of good quality currently ranges from Rs330/kg to Rs400/kg in the domestic market. According to official statement, chairman PVMA briefed the finance minister about the hike in the international prices of palm and soybean oils particularly amid ongoing Covid-19 pandemic.

The international prices had been fluctuating in the range of $1100–1257/ton and domestic market rates were based on the prevailing world prices and the dollar value, the PVMA official said, adding that the exchange rate had a significant impact on local edible oil prices. While taking stock of the situation, the finance minister directed the PVMA to adopt market-based solutions and set prices in line with international trends.

“If there is a slight dip in the international market, it must be reflected in the domestic prices so that the consumers get relief amid highly fluctuating edible oil market,” Tarin said. The finance minister stressed the need to evaluate the whole situation rationally and asked the PVMA to come up with sustainable pricing mechanism in collaboration with the Ministry of Industries & Production and Federal Board of Revenue (FBR).

Tarin directed chairman FBR to assure expeditious disbursement of refunds to the importers of vegetable oils to ensure availability of funds. He also constituted a committee comprising representatives of PVMA, secretary Ministry of Industries and Production and chairman FBR to work out arrangement for streamlining collection of sales tax and a predictable pricing formula. Chairman PVMA assured the finance minister of their full cooperation in providing maximum relief to the domestic consumers by absorbing international pressure on prices. Federal Minister for Industries and Production Makhdoom Khusro Bakhtiar, SAPM on Finance and Revenue Dr Waqar Masood, Secretary M/o Industries and Production, Chairman FBR and other senior officers attended the meeting. —