ISLAMABAD, Oct 26: Police have started raids on sales outlets of vanaspati ghee and cooking oil units across the country forcing them to reduce the price by 25 per cent.

”Police have raided sales outlets in cities like Mardan, Gujranwala, Faisalabad, Mianchanno etc asking them to reduce the price of ghee and oil,” said Chairman Pakistan Vanaspati Manufacturers Association (PVMA) Sh. Amjad Rashid.

Talking to Dawn on telephone from Karachi he said that the district police officers had raided their sales outlets in a bid to control the price. He said the increase in price was the outcome of surge in edible oil prices in international market.

When contacted Secretary Ministry of Industries Shahab Khawaja denied any role of his ministry in the current police raids on the sales outlets of ghee and cooking oil.

”We are not involved in the issue. We have not given any instructions to the police officials in this regard,” confirmed the secretary.

Apparently, it seems that the action has been taken as a result of the Supreme Court order on the prices issue. On a Suo Motu notice, the apex court had directed all the four provincial inspector generals to constitute teams of senior police officers not below the rank of SSP to launch a campaign against the hoarders, who creates scarcity of essential food items.

The PVMA chairman said that the landed cost of oil at the Karachi Port had reached Rs75 to 80 per kg. The government collects around Rs25 under taxes on per kg of oil, which is passed on to the consumers.

Asked about the possibility of reducing the taxes share in the retail price, he said the issue had already been discussed with the Federal Board of Revenue (FBR) and at the highest forum as well. The statistics show that the component of government taxes in the landed price of imported edible oil ranges from Rs22 to Rs24 per kg.

Asked about the reason for steady increase in oil prices, the chairman replied that the use of palm oil for bio-fuel by the producing countries had pushed prices in the international market. He said that to discourage exports Indonesia had again imposed taxes on export of palm oil.

To reduce the impact of surge in oil price in international market, India has reduced the import duty on oil twice to pass on lesser impact to its consumers while there has been no change in tax structure in Pakistan on oil industry for the last three years.

The chairman said that the price might even escalate to Rs105 per kg when the new crop or recently imported oil was used in the manufacturing of ghee.

According to the PVMA statement issued here on Friday, since July, 2006 the C&F price of imported edible oil-- RBD Palm Olein - has almost doubled.

The C& F price stood at $462 per ton in July, 2006, $625 on December 29, 2006, $660 per ton on March 30, 2007, $808 per ton on August 30 and to-day it is $940 per ton. This price is expected to reach $1000 per ton. Due to this increase, the price of vegetable ghee and cooking oil has continuously increased

The association maintained that it will not be possible for the ghee manufacturing units in the country to decrease the price of vegetable ghee and cooking oil and the present price level will continue to increase till March/April, 2008.