LAHORE: The Punjab government is going to impose fair (reduced) prices of vanaspati ghee and edible oil if the manufacturers do not voluntarily do this by the middle of next week, transferring the benefit of reduction in the international rates of major ingredient palm oil to people.

The manufacturers, dealers and retailers are being asked to reduce the prices through public notice.

According to sources on Saturday, the Punjab government was issuing a public notice to manufacturers, dealers and retailers to reduce the prices of vanaspati ghee and edible oils after they did not agree to do this despite numerous meetings held with their representatives.

They said since July 2014 the international prices of palm oil, which is the 90pc constituent of both the items, had been reduced to nearly $ 150 metric ton. The US dollar exchange rate was stable, and the cost of transportation and international freight rate too had been reduced due to 40pc reduction in petrol and diesel rates. Both these factors had considerably reduced the per kilo cost of vanaspati ghee and edible oil.

The international rate of palm oil in June 2014 was $ 800 per metric ton which dropped to $ 690 per metric ton next month. Its present rate is $ 640 to $ 645 metric ton.

This was a windfall but its benefits were not transferred to people, sources said claiming that the ex-mill rate of vanaspati ghee was Rs120 per kilogram but it was being sold from Rs140 to Rs190 per kilogram. The rate for the utility stores was less.

Sources said the government had given an opportunity to the manufacturers to reduce the price. If not done voluntarily, the government would impose fair prices of these items, which would match the lower international prices of palm oil, under the Price Control and Prevention of Profiteering and Hoarding Act 1977 that suggests three-year imprisonment and fine up to Rs100,000 for not following the fair price.

Published in Dawn, March 1st, 2015

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