Refiners want to hike cooking oil prices by Tk18 per litre

Cooking oil refiners want to raise the price of bottled soybean oil by Tk18 to Tk205 per litre from Wednesday, despite global prices dropping to a twelve-month low.

The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association recently sent a letter to the Commerce Ministry, seeking the price adjustment for soybean and palm oil, citing the expiration of a VAT exception for them.

Ministry officials said they will hold a meeting with sugar and cooking oil refiners soon to reach a decision.

The government in March last year lowered the value added tax (VAT) on edible oil at the import and refining stages.

The facility expired on April 30.

Under the exemption, the refiners paid 5% VAT instead of 15% at the import level while it was zero at the production stage which previously was 15%.

If the VAT cut is not extended, one litre of bottled soybean oil will be at Tk205 from the current Tk187, while five litres of soybean will be at Tk1,005 from the current Tk930, according to the refiners.

According to the new rate, the palm oil price will be at Tk129 per litre from the current Tk121.

However, edible oil distributors have claimed that representatives of the refiners have already informed them to raise the prices.

Consumers Association of Bangladesh (CAB) vice-president SM Nazer Hossain said he was surprised by the activities of both the government and the refiners.

How could the refiners raise prices in minutes after the end of the VAT exemption as the products they would sell at higher prices were brought or already been refined under the immunity? he said.

Why is the government unwilling to continue the VAT exemption facility during a time when people are in a most difficult condition amid a rocketing trend of essentials, he said.

He said the government will have to take stern action against refiners if they raise prices without the approval from the authorities.

Global soybean oil prices declined to a one-year low in April to $1,130-1,150 a tonne which should also be taken into consideration, Hossain added.