ISLAMABAD, Jan 12: The government has asked the Pakistan Vanaspati Manufacturers Association (PVMA) to cut prices of ghee and edible oil by Rs5 per kg following a decrease in the prices of RBD palm olein in the international market.

A high-level meeting between the PVMA and ministries of Industries, Production and Special Initiative, Federal Ministry of Food, Agriculture and Livestock (Minfal) and Central Bureau of Revenue (CBR) held here on Friday to influence the manufacturers to reduce prices ended inconclusive.

However, the government remained adamant and pressed the PVMA to announce a reduction in the prices soon because the industry had increased prices while following the sentiments in the international market some five-six months back.

Federal Minister for Production and Industries Jahangir Khan Tareen, who presided over the meeting, expressed concern over the continuous rise in prices of ghee and edible oil that has seen more than 24 per cent increase from January to December 2006, according to official figures.

The price of a 16-kg ghee tin has increased to Rs1,200 (Rs75 per kg) from Rs972 (Rs60 per kg) during this period.

The meeting discussed the dynamics behind edible oil price-hike in detail.

The PVMA told the meeting that the increase in the prices of RBD Palm olein in the international market caused raise in the edible prices locally.

They also asked the government to announce a considerable reduction in import duty on the palm oil as it added to increase in the cost of production.

Representative of the association said despite being producers of an essential food item, they were paying General Sales Tax (GST) at the rate of 15 per cent, which was the same as being levied on the cigarette industry. This was unfair, they said. Similarly, they were of the view that the ghee industry was paying 40 per cent import duty while the maximum duty rate was 25 per cent.

However, the government was of the view that price of RBD Palm olein has decreased by $25 per ton during the current month.

An official announcement of the government stated that the representatives of PVMA have assured that they would not increase prices further and would meet the demand of the country.

The government also asked the PVMA to ensure the sale of quality edible oil owing to its sensitive nature as it directly affected people's health.

In May last year, the government decided to ban import of edible oils by unlicensed importers to maintain quality control in the vegetable ghee industry. It was decided that the import of edible oils should be allowed to the manufacturers duly licensed by the Pakistan Standards Quality Control Authority (PSQCA), according to the declared installed capacity of their manufacturing plants.

The PSQCA had also asked the ministry of industries to issue necessary order in this regard. Under the law, PSQCA has to prepare standards of eatable goods and its recommendation on the import, sale and any related activities is binding on the government.Similarly, under the SRO 496, the ministry of commerce has already imposed a restriction that import of goods shall be subject to the same national quality standards or regulations as are prescribed in respect of similar and domestically produced goods.The government told the PVMA that in order to comply with the SRO, the imported edible oils and banaspati ghee should also conform to PSQCA standards.

According to the PSQCA, infant mortality, deaths during pregnancy, lower life expectancy, diabetes, high blood pressure and heart diseases were some of the common results of adulterated ghee and edible oils.

In 2005, the industries ministry had banned more than 50 ghee and oil brands due to their low quality.

Mr Jadoon asserted that no one would be allowed to raise prices unjustifiably and that government would keep a strict watch on the prices situation.