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Govt plans to tame soaring oil prices


Published : 12 Jan 2021 09:23 PM | Updated : 13 Jan 2021 03:31 PM

The government is planning to tame the soaring prices of edible oils by imposing single-state VAT and tariff  instead of three-tier structure to give the consumers relief.

As the upward trend of edible oil price in the international market has already pushed up the prices of the commodity in the local market the government is contemplating  to rationalize  the prices. 

 The   Ministry of Commerce has already raised the issue to the finance ministry and the National Board of Revenue (NBR) for taking necessary steps in this regard.

"We are in the process of taking steps in rationalizing the edible oil prices . Commerce secretary Dr Md Jafar Uddin already had a meeting with edible oil traders and we are hopeful of finding a solution soon," Commerce Minister Tipu Munshi told the Bangladesh Post.

Commerce ministry sources said there will be another meeting with edible oil traders by  the end of this month to take decision on the issue of the edible oil prices.

Edible oil traders have already sent a letter to the Ministry of Commerce to fix single-stage VAT expressing concern that the prices of edible oils may increase further in the country that would put extra pressure on the people.

In October, 2020 Bangladesh Trade and Tariff Commission (BTTC) recommended imposition of a single-stage VAT and tariff on edible oil to stabilize the prices of the key kitchen item.

BTTC put forward the recommendation to the National Board of Revenue (NBR) for restructuring its three-tier tax system on edible oil to a single-tier value added tax (VAT) and tariff.

Single-tier means that some Tk 16,000 will have to be provided by the traders concerned on each tonne of edible oil at import stage only instead of collecting it at three stages.

Currently, importers have to pay more than 20 per cent duty on imported edible oils, traders said.

According to Trading Corporation of Bangladesh and local edible oil wholesalers the prices of edible oils maintained an upward trend in the country in the last couple of weeks.

Biswajit Saha, director (corporate and regulatory affairs) of City Group, said the prices of the item varies from US$ 1,180 to US$ 1,200 per tonne in the international market as the main source countries such as the US, Brazil and Argentina are hit severely by the Covid-19 pandemic.

 President of the Consumers Association of Bangladesh (CAB) Ghulam Rahman said the prices of essential item like edible oil should be made tax-free for the sake of consumers.

He said the edible oil prices are going out of the purchasing power of general consumers. So, the government should take immediate steps to bring down it at a tolerable level.

In local market bottled soybean oil was selling at Tk 120-130 per litre. Palm oil super was being sold at Tk 115-120 per liter in the retail market while it was Tk 70 four months ago.

Wholesalers in the capital's Karwan Bazar said soybean oil is being sold at Tk 4,400 per quintal (Maund)  (37.32 kg). Last week it was Tk 4200.

Rezaul  Karim, who came to the capital's Nayabazar to buy edible oil said he did not know how to cope with the increasing  prices as rice and several essential products prices are also rising with the  oil  price rise. 

Habibullah, an employee of garments factory, said he always bought bottled oil but last week he bought open soybean oil because of the high price.

"I bought open soybean oil at Tk 125 per litre. People like us have to spend extra money for edible oils. The government should pay attention to it," he added.