LAHORE: The Punjab government on Wednesday imposed a Rs15 per kilo/litre reduction in the rates of vanaspati ghee and cooking oil to shift the benefit of a marked fall in international prices of palm oil from manufacturers to the public.

The ‘fair price’ was imposed under the Price Control and Prevention of Profiteering and Hoarding Act, 1977 by Industries Secretary Dawood Muhammad Bareach after ghee and cooking oil producers failed to do so despite public notices published in newspapers under the same law.

Officials claimed the manufacturers and sellers of these two items were earning Rs4 billion a month over and above their normal profit. The order would transfer the benefit of this windfall to people.

Copies of the gazette notification of the order were sent to all district coordination officers (DCOs) for strict enforcement.

The law provides for up to three-year imprisonment and Rs100,000 fine for not obeying the order, which follows reduction in prices of petroleum products in the country to transfer the benefit of a fall in the international rates of crude oil to people.

Officials said the order was not arbitrary as rates of palm oil and the extraordinary profit of manufacturers and sellers were verified by the competent authority.

The imposed fair price was calculated as per the $660 per metric ton rate of palm oil internationally. The rate had further dropped to $605 on Tuesday. And the fair price of the two items would be reduced further if the fresh price continues to persist or falls, they said.

The order says the palm oil prices have been reduced by around $150 per metric ton in the international market in the last six to eight months but there was no relief for consumers.

Representatives of the Pakistan Vanaspati Ghee Mills Association were repeatedly asked to voluntarily reduce the prices. The association in a letter on Feb 28 admitted that “as per its market survey, indeed the prices of ghee fluctuates in the range of Rs135 to Rs185, which in any way is not defensible being unjustified”.

It further says the manufactures, producers, dealers and importers are beneficiaries of these higher profits. They are not transferring the benefit to the end consumers and are indulging in unnecessary profiteering.

“Now, therefore, in exercise of the powers vesting in the undersigned under Section 3 of the Price Control and Prevention of Profiteering and Hoarding Act, 1977, the undersigned is of the view that a minimum reduction of existing price by Rs15/kg/litre across the brands would be the fair price. I order accordingly. The ghee/edible oil shall, with immediate effect be sold at the reduced price as aforesaid,” the secretary said in his order.

Meanwhile, speaking at a news conference Rana Sanaullah, who is chairman of the committee on enforcement of reduction in essential items, said action had been taken under directions by the chief minister. The government had now dealt with the profiteers with an iron hand.

“This mafia tends to quickly increase the rates of essential items but refrains from reducing them.”

He appealed to ghee and cooking oil producers to obey the orders and provide relief to consumers. He also appealed to the people to inform their DCO concerned, assistant commissioner or authorities on toll free number 08000-2345 in case they were not sold the two items at the fair price.

Food Minister Bilal Yasin and MPA Zaeem Qadri were also present on the occasion.

Published in Dawn, March 12th, 2015

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