KARACHI, Nov 2: Consumers will have to face another price-hike in branded ghee and cooking oil as distributors of one of the leading players have informed retailers about the expected increase in the price of five kg/litre tin of ghee and cooking oil.The one kg pouch of Dalda will now cost Rs112 as compared to Rs104 per kg, said Farid Qureishi, General Secretary, Karachi Retail Grocers Group (KRGG).
“Distributors of the leading brand have already informed retailers about the possible increase in prices and they have also stopped distribution.
“The product with new price tags will arrive in the market in the next few days,” he said, adding the price increase made by a market leader will induce others to follow the lead.
This will be the sixth price-hike by the branded ghee and cooking packers since September 2006.
Dalda had increased the rate ahead of Ramazan to Rs530 for five kg/litre tin from Rs498. In February, 2007, rates were enhanced by Rs4.8 to Rs6 per kg/litre on ghee and cooking oil tins.
Earlier the producers had increased the rate ahead of Ramazan (September 2006) by Rs4 per kg, followed by Rs5 per kg in December 2006. In September 2006, five kg ghee tin was available at Rs395.
A packer had cautioned about further increase in prices as this rise was the result of one-and-a-half month back shipment of palm olein from Malaysia and Indonesia.
Chairman, Pakistan Vanaspati Manufacturers Association (PVMA), Shaikh Amjad Rasheed, said that he had asked the chairman, Federal Board of Revenue (FBR), Abdullah Yousuf, to rationalise import duty structure on palm olein, but the FBR flatly refused, saying the cut in duty would hit revenue collection.
He said that both the FBR and the finance ministry were not ready to cut import duty on palm olein as officials said the government was already providing heavy subsidies to keep the petroleum rates stable, so it was not possible to cut duty on palm olein.
However, Shaikh Amjad said consumers will continue to face the brunt of higher prices with rising trend in palm olein rates in world markets.
He said the Police and the DPOs continued to raid ghee manufacturing units and distributors and shopkeepers of vegetable ghee and cooking oil, mainly in Punjab, forcing them to reduce the price of vegetable ghee/cooking oil by 25 per cent.
Even FIRs have been registered against many of the vegetable ghee/cooking oil units, vegetable ghee distributors and shopkeepers. This action of the Police and DPOs has resulted in mass harassment of all manufacturers/retailers of vegetable ghee/cooking oil.
The C&F price of imported RBD palm olein had jumped to $975 per ton from $465 in July 2006. The production cost of vegetable ghee, leaving aside profit margin of the manufacturers, which was Rs57,415 per ton in July 2006, had increased to Rs93,538 per ton or Rs93.54 per kg on Nov 1.
Cooking oil: About 30 per cent of the total consumption was manufactured from imported soybean oil, RBD palm olein and edible oils produced in the country.
The C&F price of these edible oils had also increased in line with RBD palm olein.
In these circumstances, manufacturers of vegetable ghee and cooking oil are unable to reduce price of vegetable ghee and cooking oil as they are presently selling the same without earning any profit.
He said the component of government duties and taxes in the production cost of vegetable ghee/cooking oil in July 2006 was Rs18 per kg, which has now increased to around Rs23 per kg.
Domestic prices can only be reduced if substantial cut is made in duties and taxes.
