ISLAMABAD, June 10: All the parties involved in the edible oil industry in a public hearing held by the National Tariff Commission decided in favour of continuation
of the existing tariff structure amidst allegations that they were filling tins with untreated palm oil and thus playing with the health of the people.
Even more ominously, it was charged, all the firms with some honourable exceptions, were supplying cooking oil/vanaspati ghee to major cities of a quality different from that sold in the rest of the country.
Particularly, callous was their attitude towards the poor who had to purchase small quantities of cheap variety, not knowing what they were paying for is not ghee but a recipe for disease.
Pakistan, NTC Chairman Dr Faizullah Khilji remarked, was the only country with a special duty structure on edible oils. While on all other products, a four-tier tax structure with rates of five per cent, 10pc, 20pc and 25pc was applied, there existed 41 different rates of duty on edible oils. This resulted in numerous complications and malpractices.
Therefore, all the participants agreed that the same escalating/cascading system of tax as applied to other products be enforced in the case of edible oils in the long run.
The hearing was convened on Wednesday on the request of the Central Board of Revenue following the demands for increase/ decrease in tariffs made by the two main associations - the All Pakistan Solvent Extractors' Association (APSEA) and the Pakistan Vanaspati Manufacturers Association (PVMA).
The PVMA had demanded that the customs duty on imported edible oils be reduced by 50 per cent "to neutralize the impact of price increase in the international market".
(In fact, when the international price dropped drastically a few years ago, the benefit thereof was not passed on to the consumer but divided by the importers/ packers and the government between themselves).
On the other hand, the APSEA had called for a raise in import duty on crude palm oil (CPO) of Rs500 per ton and continuation of GST on all edible oils at 20pc. For itself, it demanded reduction in GST on oilseeds from 20pc to 15pc and exemption from tax on soybean meal extracted from imported rapeseed and of import duty on all other edible oils at present levels.
But the things went awry for them when Kaukab Iqbal, Chairman, Pakistan Coconut and Oil Palm Plantation Society, charged that both the PVMA and the APSEA wanted to block the establishment ofmodern refineries with the capacity to provide healthful edible oil to the people.
This was because neither the extractors nor the ghee manufacturers had proper refining facilities and they simply filled unrefined oil in used tins, which was extremely dangerous for human health.
It appeared from the discussions that the extractors, through a peculiar arrangement with the Pakistan Oilseeds Development Board (PODB), fixed a "minimum" price of sunflower and canola seeds to the exclusion of locally-produced palm oil and coconut oil.
This arrangement is a sop for the windfall profits from the import and sale of imported palm oil. Any increase in price paid on local oilseeds is over-compensated by the high prices charged on imported product that constitutes more than 70 per cent of total sale of edible oils in Pakistan.
Confirming the allegations of Mr Iqbal, Ijaz Hussain Malik, Group Executive Director of Habib Oil Mills, said most of the firms did not have refining facilities or laboratory. In cases where they did have such facility, they had not employed qualified chemist. Some PVMA members were filling un-refined CPO, while marketing tins with under-weight contents.
