Home ›› 04 May 2023 ›› Front
Four and a half months after the withdrawal of VAT facility, the government has decided to increase the prices of edible oil again.
At the same time, besides the edible oil, the price of sugar will also increase, but it has not been decided yet how much it will increase, according to sources from the commerce ministry.
The decision was made at a meeting organised by the commerce ministry at the office of Bangladesh Trade and Tariff Commission at Segunbagicha in the capital on Wednesday.
According to sources from the meeting, the new price of bottled soybean oil is likely to increase by Tk 11 to Tk 13 from the existing Tk 187 per litre. And the price of palm oil per litre may increase by Tk 12 from the existing Tk 117. The new rate is likely to be effective across the country from Thursday.
On anonymity, a representative from sugar refiners’ association who participated in the meeting told The Business Post, “In the meeting, we proposed to set the price of sugar at more than Tk 130 per kg.”
The meeting was participated by officials of the ministry and tariff commission as well as representatives of FBCCI and various groups of edible oil and sugar refineries including TK, Bashundhara, CT and ACI.
Emerging out of the meeting, TK Group Director Shafiul Atahar Taslim told The Business Post, “At the meeting, we have presented our arguments on behalf of edible oil refiners association detailing the reasons why the prices should be increased. In response, tariff commission officials analysed our placed evidences and finally reached a decision. The commission offered to set the price of per litre bottled soybean oil at Tk 198, but we wanted it to be Tk 200.”
“The decisions made at the meeting have been sent to the commerce ministry for final approval. The ministry will disclose its final decision on Thursday,” he added. Earlier, the traders proposed to increase the edible oil price by Tk 15 per litre.
Meanwhile, the sugar refiners said that the price of non-refined sugar in the international market has increased to such an extent that the import price is now Tk 131. So, the wholesale and retail prices must be higher than the import price.
On Sunday, Bangladesh Vegetable Oil Refiners and Banspati Manufacturers Association sent a letter to Commerce Secretary Tapan Kanti Ghosh, requesting to adjust the prices of soybean oil and palm oil; in other words, to increase the prices of edible oil. Traders mentioned to increase the price of bottled soybean by Tk 15 from Wednesday.
On Tuesday, Secretary General of Bangladesh Sugar Refiners Association Golam Rahman sent a letter to the commerce ministry. Mentioning the issue of sugar import at an increased price, he sought a decision from the ministry about the wholesale and retail prices of sugar in the local market.
Edible oil refiners said that the notification issued by the National Board of Revenue (NBR) on March 16 last year to levy 5 per cent VAT on import of edible oil expired on Sunday. From Monday last (May 1), a 15 per cent VAT is supposed to be paid at import level to get raw materials of edible oil released. Apart from this, edible oil has to be supplied to the market from Monday with 15 per cent VAT at the production level as well.
As the VAT will be collected at the previous rate now, oil refiners association claimed, one-litre bottle of soybean oil will have to be sold at Tk 205, five-litre bottle at Tk 1,005, one litre of open soybean oil at Tk 184 and one litre of open palm oil at Tk 129. Therefore, the association has decided to implement the new rates from Wednesday (May 3).
On December 15 last, the official price of 1 litre of bottled soybean was reduced by Tk 3 per litre to Tk 187. Earlier on November 17, the association increased the price of bottled soybean oil from Tk 178 per litre to Tk 190.
Meanwhile, the Sugar Refiners Association said in its letter that the price of unrefined sugar has increased a lot in the international market. Currently, the price of sugar per metric tonne is $675, which was $520 a month ago. In this context, members of the association are reluctant to open letters of credit (LCs) for importing sugar. Because if the sugar is imported at $675 per metric tonne, the import price of sugar stands at Tk 131 per kg; which includes government duty, VAT and other taxes of Tk 35.
According to the letter, despite this price hike in the international market, the price of open sugar in the country’s market has not increased accordingly. As a result, the association members are reluctant to import sugar.
In this regard, Golam Rahman said this letter has been given to attract the attention of the government to the unusual situation prevailing in the international market. Importing sugar at this price will increase the retail price a lot in the market.
The NBR reduced the regulatory duty on sugar at the import level from 30 per cent to 25 per cent in February last. At the same time, the NBR also withdrew the import duty of Tk 3,000 on per tonne of unrefined sugar and Tk 6,000 on per tonne of refined sugar. This facility will be valid till May 30.
However, this move of the revenue board failed to stabilise the sugar market. Due to the duty reduction, the sugar price was supposed to be reduced by Tk 5 to Tk 5.5 per kg, but on the contrary, the price of sugar has increased.
In April, the government fixed the unpacked sugar price at Tk 104 per kg, but the price did not fall below Tk 115 in the retail market.
According to the Trading Corporation of Bangladesh (TCB), sugar was sold at Tk 125 to Tk 135 per kg in the market on Tuesday. In some markets in the capital the price of sugar has increased to more than Tk 140. Many have stopped selling sugar because they will not sell it at a higher price.
