The government is likely to review the surging edible oil prices and announce relevant measures soon, reports suggest. In the wake of the increasing price, the government considers to ‘cut import duty’ on the edible oil, the Economic Times reported quoting sources.
The food ministry has sent a proposal to the Empowered Group of Ministers to review cooking oil prices, and a meeting may be called soon. Sources said a decision on import duty reduction may be taken in that meeting, mentioned the Economic Times in its report. The cooking oil prices have gone up by 35-95 per cent in the last one year. The prices of mustard oil nearly doubled while the rates of sunflower oil increased upto 95 per cent and a 50 per cent rise was noticed in peanut and soy oil prices.
The government had announced a 10 per cent cut in import duty in November to curb the rising prices. But the market forces had predicted the surging price of cooking oils till April-May 2021. The Solvent Extractors Association of India (SEA) had requested the government to ‘freeze the tariff rate for the next six months’ and ‘to subsidise the sale of edible oil through the public distribution system’, according to a Financial Express report published in November 2020.
During the Budget announcement, Union Finance Minister Nirmala Sitharaman had slashed import duty and custom duty for edible oils. The basic import duty on crude palm oil was reduced to 15% from the earlier 27.5% and basic custom duty on soybean oil and sunflower oil also cut to 15% from 35% earlier.
The government’s measures have not yielded results yet as the exporting countries increased prices and export duties on cooking oil. India imports around 70 per cent of its required cooking oil from foreign countries, mostly from Indonesia and Malaysia. Since the outbreak of the Covid-19 pandemic, the supply of the edible oils from the major exporting countries has gone down while the demand increased manifold in the domestic market.
Now, a price review and import duty cut may bring much needed relief for the consumers.