ISLAMABAD, Dec 26: The price of a 16kg tin of vegetable ghee rose more than 23.45 per cent to Rs1,200 in December 2006 from Rs972 in January, thus putting more pressure on the low income group.

Price of other commodities, including cooking oil, also witnessed an upsurge in price during the period under review, which rendered the essential kitchen item dearer for the consumers. Ghee and cooking oil manufacturers have warned the government of further increase in prices of vegetable ghee and cooking oil due to high taxes and decrease in supply of edible oils to the international market.“This increase is despite the fact that some of the profit of ghee manufacturing units has not been passed on to the consumer,” said Pakistan Vanaspati Manufacturers’ Association (PVMA) Secretary Dr Ghulam M. Samdani.

The secretary admitted that the PVMA realised the pressure of increase in ghee prices on consumers. He attributed the upsurge in price with huge share of duties and taxes which stood around Rs19 per kg. He said that in India the tax incidence on the ghee industry was flexible to pass on relief to consumers in case the price of raw material went up.

“Reduction in government duties and taxes will obviously be passed on to consumers by the ghee manufacturing units,” he added.

Pakistan has lost around 50 per cent of market access for export of ghee and cooking oil in Afghanistan following the heavy duty and taxation regime in the edible oil sector.

Mr Samdani said that the PVMA has urged the Central Board of Revenue to review the situation objectively and consider rationalisation of duties and taxes for the benefit of the public at large.

This move would also boost the export of vegetable ghee/cooking oil to Afghanistan as the country has lost maximum market in Afghanistan as a result of uncompetitive export price in Pakistan, he added.

The PVMA secretary said that the government has been using ghee manufacturing units as a cash cow and has not paid heed to requests of the association. Ghee manufacturing units have been saving consumers from the undue increase in the price of vegetable ghee as far as possible, he claimed.

The PVMA has asked the government to reduce the withholding tax to 1 per cent from 3 per cent on imported edible oils. “Even 1 per cent surcharge is more than enough of the income tax chargeable from vegetable ghee/cooking oil manufacturers,” Mr Samdani added.

During the last three months period, the PVMA member units received a short supply of edible oils of 2,115 tons of total 423,810 tons dispatched by exporters of Indonesia and Malaysia.