Edible oil supply spikes

The supply of edible oil has increased significantly in markets after the government decided to withdraw value-added tax (VAT) on imports of the kitchen ingredient.

Loose and bottled soybean and palm oil are now available at almost every shop in the capital, which has also reduced their prices to some extent.

A number of retail traders told The Business Post that wholesalers have hinted at a further reduction of oil prices in the coming days, adding that the brand companies are now also supplying the kitchen ingredient, although it is not adequate.

Retailers are optimistic that the cooking oil supply will be normalised within the next one or two days.

VAT withdrawn till Jun 30

The government decided to withdraw VAT on edible oil imports till June 30 to keep it affordable for consumers during the upcoming Ramadan. It has also decided to withdraw import duties on sugar and chickpea for the same reason.

Finance Minister AHM Mustafa Kamal on Thursday made the announcements while briefing reporters after two consecutive meetings of the Cabinet Committee on Economic Affairs and the Cabinet Committee on Government Purchase.

The government withdrew 15 per cent VAT on edible oil imports at the production level and 5 per cent at the consumer level. Edible oil prices will drop by Tk 33.6 per litre once the withdrawal comes into effect. Oil is currently sold at Tk 168 per litre in the retail market.

Currently, 15 per cent VAT is imposed at both import and production levels of edible oil and 5 per cent at the supply stage.

Kamal said VAT on the import of these commodities was withdrawn as their consumption is higher during Ramadan, adding the government was extending the necessary cooperation in this regard. “The Russia-Ukraine war

has hampered supply in the international market and caused transportation costs to shoot up. Suppliers are taking advantage of this, which has further escalated prices,” the minister explained. He said the syndicate that manipulates prices and creates suffering for the public is still active even though a war is going on.

A high official at the National Board of Revenue (NBR) said the duty and vat withdrawal orders will be issued on Sunday, as the proposals were sent to the law ministry for vetting.

Bangladesh Trade and Tariff Commission as well as the commerce ministry had earlier urged the revenue board several times to withdraw VAT on edible oil imports. The Federation of Bangladesh Chambers of Commerce and Industry on March 7 also urged the government to withdraw VAT on edible oil imports for three months.

Kamal said the government had taken initiatives to provide commodities for one crore families across the country through the Trading Corporation of Bangladesh (TCB). TCB’s operations would be extended to unions to supply products easily to people, he further said.   

Enquiry team formed

The Bangladesh Competition Commission on Thursday formed a three-member enquiry team to investigate the reasons behind edible oil price hikes and instability in the market, read a press release on Thursday.

The commission urged everyone concerned to provide information regarding anti-competitive practices in the market using the email – [email protected]. Bangladesh Competition Commission’s Chairperson Md Mofizul Islam said, “The committee has been asked to provide a report within the next 15 days. It will investigate whether anyone is creating instability in the market by forming a syndicate and disobeying the Competition Act.

“Besides, the team will investigate whether the big companies are hiking the prices to take advantage of demand. If such allegations are proven, we will take action against them as per the law.”