ISLAMABAD, June 14: The Pakistan Vanaspati Manufacturers Association (PVMA) has blamed the government for unprecedented increase in the price of vegetable ghee and cooking oil during the last seven months.

At a press conference here on Thursday, PVMA chairman Sheikh Amjad Rashid said the association had proposed measures for rationalisation of duty and taxes on edible oil for bringing down the price of essential items.

“In spite of best efforts by the PVMA for getting a relief in government taxes for the benefit of vegetable ghee or cooking oil industry, as well as for the general public, the government did not accede to any of the proposals, except giving a negligible benefit by reducing withholding tax from three to two per cent,” he added.

He warned that prices of edible oils and vegetable ghee are likely to increase by almost Rs5 per kg in the next two months.

He advised the government to consider their proposals for passing on benefit to consumers. Palm oil is the major input used in the manufacture of edible oil and vegetable ghee. The palm oil price, which was $462 per ton in July 2006, has went up to $785 on June 13.

He said during the first week of June, the palm oil price even went up to $900 per ton. The PVMA chairman said because of the cut-throat competition and availability of the already stored palm oil stock, the industry has been selling cooking oil at price lower than its current cost of production after the high increase in the palm oil price in the international market.

The PVMA proposed that federal excise duty on import of edible oils should be fixed at Rs5,700 per ton and withholding tax from Rs1,000 to Rs1,200.

It was also proposed that 100 per cent refund be provided on customs duty, excise duty and sales tax on export of vegetable ghee or cooking oil. To eliminate the discrimination, he said it was proposed to allow import of CPO at a customs duty of Rs9,000 per ton as par with CPO refineries.

It has also been proposed to reduce duty on tin-plate and enhance duty on import of vegetable ghee to provide protection to local industry. He said none of these proposals were considered in the budget.