Edible oil refiners seek to hike prices

Edible oil refiners in Bangladesh yesterday sought to increase their prices by up to 9.62 per cent as the industry will no longer enjoy a reduced tax benefit following the completion of its one-year tenure.

The National board of Revenue (NBR) had reduced the value-added tax (VAT) on edible oil by 10 per cent to 5 per cent in March last year in a bid to provide consumers with some relief in the face of growing international prices.

More than 90 per cent of the country's demand for edible oil is currently met through imports due to insufficient domestic production.

However, the government may not accept the proposal as global prices have fallen, said an official of the commerce ministry on condition of anonymity.

"A decision will be taken in this regard only after the Bangladesh Trade and Tariff Commission examines the proposal in detail," he said, adding that they would meet with industry stakeholders on May 3 to discuss the next step.

In the meantime, refiners will have to pay 15 per cent VAT on imports of unrefined edible oil from today.

In a letter to the commerce ministry, millers and refiners proposed that the price of soybean oil should be increased to Tk 205 from Tk 187 per litre at the retail level.

In addition, the price of five-litre bottles of the key cooking ingredient should be hiked to Tk 1,005 from Tk 906 while loose soybean oil should be sold at Tk 185 per litre instead of Tk 167, it said.

Similarly, they suggested raising the price of loose palm oil to Tk 129 from Tk 117 per litre as well.

However, Senior Commerce Secretary Tapan Kanti Ghosh said the ministry would soon write to the NBR for continuing its reduced VAT benefit.

"If the NBR follows the ministry's proposal, then prices of edible oil may be readjusted to a lower level. If not, then prices will go up," he added.

The development comes at a time when consumers are already reeling from historically high prices for another kitchen essential, namely sugar.

Ghosh said domestic prices of the sweetener have risen in line with its value at the global level.

Sugar was yesterday sold at $680 per tonne in international markets, up from $475 per tonne more than one month ago.

As such, the sweetener is now going for as much as Tk 135 per kilogramme in local markets compared to Tk 120 per kilogramme during Ramadan, when the price was not adjusted.