Govt considering fixing ghee, cooking oil prices

LAHORE: The federal government is considering fixing ghee and cooking oil prices in the open market by exercising the powers of controller general of prices (CGP) as ghee manufacturers are yet to pass on the benefit of reduction in RBD prices to consumers.

The ghee and cooking oil prices of A-category brands are still at Rs 580/kg/litre while that of the C-D category are above Rs 400/kg/litre as the international RBD price is down to $1050/ton.

The federal secretary Ministry of Industry and Production also has the power of controller general of prices and can fix the prices of any commodity under the law. The notified rate of CGP is implemented by the provincial secretaries for industries, who also have the power of CGP. Recently, the power of CGP was exercised in the case of sugar prices when they were getting out of control.

According to the data available with The News, the price of ghee and cooking oil should not be higher than Rs 375/kg/litre in view of RBD $1050/ton import price. The landed cost of RBD palm oil at $1050/ton is Rs 294,477/ton.

Federal Secretary Ministry of Industry and Production (MoIP) Imdadullah Bosal, talking to The News, said that before Eid, the PVMA was asked to submit its costing formula and price notification to the ministry. Further, the chief secretaries of all the four provinces were asked to submit the market price, stocks and ghee availability situation. It is also requested to the Security and Exchange Commission of Pakistan (SECP) to submit the cost of manufactured ghee. “We have asked the PVMA to pass on the reducing impact of the RBD import price to consumers. Otherwise, strict measures will be taken,” Bosal said, adding that the chief secretaries had been asked to implement the reduced prices. He said the government was not in favour of taking strict measures as it created distortions in the market. But if the industry did not pass on the impact, there would be no other option.

Meanwhile, the industry sources confirmed that the MoIP secretary, who is also heading the PM Taskforce on Ghee/Cooking Oil, had already warned the industry to bring down the prices.

PVMA Chairman Tariqullah Sufi said the prices of ghee and cooking oil had started declining in the domestic market. He claimed that a 16-kg ghee tin price is down to Rs 8,000-8,400 at mill level. This means the consumer price is maximum Rs 550 per kg. The price will further come down in the coming days as the RBD $1050/ton is the August supplies price while the current supplies are being made from RBD oil imported at $1600/ton. He claimed that the mills were incurring losses. But it was part of the business, he said, adding that the mills could not keep the prices on the higher side due to tough competition in the market.

About the price of ghee/cooking oil in the range of Rs 375/kg/litre in view of the RBD $1050/ton import price, he said the prices of premium brands would come down to this level in August when the mills produced ghee/cooking oil as per the imported price. He claimed that shopkeepers were not passing on the impact to the public.