Government Demands Explanation for Rising Cooking Oil Prices Amid Duty Hike

The government has asked edible oil firms to explain the rise in cooking oil prices, following a recent hike in import duties. Despite guidance to maintain stable prices due to adequate stocks imported at lower costs, prices have increased ahead of the festival season. The hike aims to support domestic oilseed farmers.

The government on Friday demanded an explanation from edible oil companies regarding the increase in retail prices of cooking oils. This comes despite previous advice to ensure price stability due to sufficient stocks imported at lower duties.

On September 14, the Centre increased the basic customs duty on various edible oils. However, during a meeting with industry bodies on September 17, the food ministry stressed that retail prices should not rise. ''The industry has been requested to clarify why prices are rising following the import duty hike,'' said a senior food ministry official on Friday. The ministry asserted that stocks from lower duty imports could last 45-50 days, discouraging processors from raising maximum retail prices, especially ahead of the festival season.

From September 14, 2024, basic customs duties on crude and refined edible oils have seen a significant increase. Effective duty on crude oils is now 27.5 per cent, while refined oils face a 35.75 per cent duty.

Food Secretary Sanjeev Chopra held a meeting with industry representatives to discuss the pricing strategy. ''Leading edible oil associations were advised to keep the MRP stable until stocks imported at lower duties are exhausted,'' an official statement said.

The central government also noted that around 30 lakh tonnes of lower-duty imported edible oils are available, enough for 45-50 days of domestic consumption. With over 50 per cent of edible oils being imported, the country heavily relies on imports from Malaysia, Indonesia, Brazil, Argentina, Russia, and Ukraine.

The hike in import duties aims to support domestic oilseed farmers, particularly with new crops arriving in October 2024, the food ministry stated.

(With inputs from agencies.)