KARACHI: As Finance Minister Shaukat Tarin on Friday approved a 10 per cent tax cut on the import of edible oil for April and May, the prices of ghee and cooking oil have already reached close to Rs500 per kg/litre ahead of Ramazan due to soaring palm oil rates and rupee devaluation against the dollar.

The prices of branded ghee and cooking oil are in the range of Rs440-490 per kg/litre in the market, Karachi Retail Grocers Group (KRGG) general secretary Farid Qureishi said, adding that people are compromising on the quality owing to a steep rise in prices.

Shaukat Tarin on Friday approved the relief to check the rising trend in ghee and cooking oil prices and deal with the expected shortfall in the holy month.

Tarin announces 10pc tax relief on palm oil imports

The tax relief measure on the import of edible oil is being undertaken for the short-term to ensure a smooth supply of edible oil to consumers as 90pc of the nation’s annual demand for ghee/cooking oil is met through imports.

Commenting on the relief, Senior Vice Chairman Pakistan Vanaspati Manufacturers Association (PVMA) Sheikh Amjad Rasheed said confusion has gripped the edible oil market after the government’s decision of providing a tax relief of 10pc on the edible oil imports.

He said this is the first time in my 40 years of experience that sales of ghee and cooking oil have been showing depressed trend due to high prices and squeezing purchasing power of people.

He said palm oil stocks had also never fallen to 150,000 tonnes at the port from the normal stocks of 250,000 tonnes ahead of Ramazan due to reluctance of industry and traders towards import of palm oil because of persistent rupee fall against the dollar and soaring palm oil rates in the world market.

He elaborated that the cumulative impact of duties and taxes comes to Rs95,000 per tonne on import of palm oil-based on the current palm oil rate of $1,700 per tonne on which customs duty is Rs9,180 per tonne on palm oil followed by 17pc general sales tax, 2pc income tax, 2pc additional customs duty and value-addition tax.

Assuming that the government has provided tax relief of 10pc on cumulative cost of import of palm oil then it would bring down the price by Rs10 per kg/litre on ghee and cooking oil which cannot be termed as a relief, Amjad said, adding that “this is too little, too late.”

Published in Dawn, March 26th, 2022