To control the rise in edible oil prices during the festival season, basic tariffs on palm, soybean and sunflower oils were further reduced, resulting in a loss of revenue of Rs 1,100 crore , the government announced on Saturday.

The move, according to the industry, could lower retail prices by 4-5 rupees per liter.

Tariffs have been reduced on crude and refined variants of these three cooking oils, according to a statement from Consumer Affairs, Food & Public Distribution. But agriculture on crude palm oil has been increased from 17.5% to 20%, he said.

The Ministry of Finance has notified the drop in customs duties for these oils from September 11 until further notice, he added.

In accordance with the notification from the Ministry of Finance, the basic import tax on crude palm oil was reduced to 2.5% from 10%, while the tax on crude soybean oil and oil of raw sunflower was reduced to 2.5% from 7.5%.

With this reduction, the effective duty on crude palm oil, crude soybean oil and crude sunflower oil will increase to 24.75 percent, while the effective duty on refined palm oil, l soybean oil and sunflower oil will be 35.75 percent.

The move comes against a backdrop of uninterrupted price increases for edible oils in India – which imports 60% of its demand – despite several recent government measures.

The Ministry of Food and Consumer Affairs said that due to international prices, “domestic prices for edible oils were high in 2021-2022, which is a source of serious concern from the perspective of the industry. inflation and consumers “.

Import duties on edible oils are one of the important factors that impacted the landed cost of edible oils and therefore on domestic prices, he said.

Import duties on edible oils were reduced a few months ago and have been further reduced to stimulate domestic supply and curb price increases.

According to the ministry, the current reduction in tariffs on these cooking oils will result in an estimated loss of revenue of Rs 1,100 crore.

And with an additional loss of revenue estimated at Rs 3,500 crore resulting from the earlier reduction in tariffs on these oils, the government will bear a total loss of Rs 4,600 crore which is expected to be passed on to consumers, he said. -he adds.

Solvent Extractors’ Association of India (SEA) executive director BV Mehta told PTI that the new round of cuts “could lower retail prices by Rs 4-5 per liter.”

It is also generally seen that prices are getting tougher in the international market after India cuts its import tariffs, so the actual impact could be as little as 2 to 3 rupees per liter, he said. said and added that the government should have reduced import duties on mustard oil (rapeseed) as well to cool prices.

Retail prices for edible oil in the country have risen in the range of 41 to 50 percent over the past year.

To control the prices of edible oils, the ministry not only asked states to take action against hoarding at the level of wholesalers, millers and refiners by asking them to disclose their stocks, but also asked retailers to post prominently displayed the prices of all brands of edible oils. for the benefit of consumers.

“…. Some states have already notified that they (retailers) simply have to display what price it is available for. Then it is up to the consumer to choose whether to buy brand x or y according to their own preference.” Union Food Secretary Sudhansu Pandey told media after a meeting with state officials and industry stakeholders on Friday.

Consumers can choose the cheapest and brands will also be under pressure to reduce prices, he said, adding that state governments would enforce the obligation to display prices.

Total imports of vegetable oils (edible and inedible oils) from November 2020 to July 2021 decreased by 2% to 96 54 636 tonnes, compared to 98 25 433 tonnes in the corresponding period of the previous oil year (November -October), according to SEA data.

Edible oil is India’s third largest import after crude oil and gold.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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