ISLAMABAD, July 12: Pakistan Vanaspati Manufacturers Association (PVMA) has urged the government to re-examine the subsidy system introduced through Utility Stores Corporation (USC).

The PVMA Chairman Amjad Rashid criticised the government subsidy scheme saying it had resulted in reduction of sale of edible oil products in the local markets.

He proposed a range of measures to reduce the impact of subsidy on the industry by ensuring transparency in the procurement of vegetable ghee and cooking oil stocks for USC.

The Pakistan Vanaspati Manufacturers Association feels that its proposals will be seriously considered by the government to protect the consumers at large and the vegetable ghee and cooking oil industry, he added.

He said the government instead of reducing the incidence of tax on vegetable ghee or oil chose to provide massive subsidy on sale of these products through USC, of which benefit will not reach more than 15 to 20 per cent of the population.

In fact, the mechanism of subsidy on USC is limited to urban population as the rural areas mostly below poverty line have no access to the USC. Furthermore, the government is also patronising specific brands for sale through the USC, he added.

He said it was being reported by the members of the PVMA that subsidised vegetable ghee, cooking oil sold at Utility Stores Corporation (USC) was being purchased by the dealers and stocked by shopkeepers all over the country and sold directly to the consumers at a price higher than the subsidised price fixed by the government.

In such a situation, the heavy subsidy allocated by the government for the purpose is being pocketed by the dealers, shopkeepers and their staff.

He said the Utility Stores Corporation managers were also involved in this practice and truck loads of vegetable ghee and cooking oil were being sold to the shopkeepers by them.

Price difference being attractive the practice is widespread and negates the very intention of the government to provide relief to the targeted masses.