Fix bottled soybean oil cost at Tk 124 a litre
The Bangladesh Trade and Tariff Commission (BTTC) has recommended setting the maximum retail price of soybean oil at Tk 124 a litre to tame its spiralling rates in the local market.
Nowadays bottled soybean oil is sold in Tk 130 a litre on the average, which is exorbitantly high, the commission said in its report just lately submitted to the commerce ministry.
Moreover, the price for every single empty one-litre bottle of soybean oil has been fixed in Tk 15 and the five-litre types in Tk 50, which are also high considering the current state of the plastic industry, it said.
The cost of empty bottles should be lowered now to create soybean oil somewhat cheaper, the commission suggested. The purchase price monitoring cell offers agreed to set the utmost retail selling price for loose soybean oil at Tk 109 a litre, according to the BTTC report received from the commerce ministry.
Crude soybean and pam oil rates have increased 63 % in the last half a year going to $1,200 and $1,150 a tonne found in the international market, according to the report.
To cool straight down the prices, the federal government should right now follow the 2011's model of pricing, under which a 15 % VAT was collected in 67.67 % of the soybean oil's import value to keep the prices low for the overall mass, the report suggested.
Otherwise the oil rates will rise to Tk 150 to Tk 155 a litre after per month when the crude oils which have already been imported will get refined to be produced edible, it said.
Considering the getting power of everyone, the cell also wished to see alters in the tariff establishing system and exemption of advance VAT.
The recommendations are essential for the market as the prices of necessary commodities, including edible oil and sugar, are determined predicated on the opinion of the fundamental Commodity Value Monitoring Cell (ECPM) of the BTTC.
In case of profits per litre, the oil companies are permitted to have a maximal margin of 2 per cent as the distributors Tk 4 and the retailers Tk 8.
The cell sets the mill gate price, distributor price and maximal retail price of all kinds of soybean oil.
The ECPM considers several issues, including the international industry prices, VAT and tax, refining cost, bottle price and profit of the business, before deciding the retail price of something.
"The cost of edible oil in the global industry is increasing almost every moment, as big countries like China will be stockpiling edible oil from the worldwide industry amid the pandemic," explained Biswajit Saha, director of City Group.
Beside, production of top oil exporting countries, including Brazil and Argentina, features declined because of the Covid-19 outbreak, he said.
The import price may increase further which could impact Bangladesh's localized market, Saha said.
"Over the last few months, we've been urging the government to withdraw the progress tax and decrease the VAT in the import level to keep carefully the oil industry stable. However the government is however to implement it."
Meanwhile, the commerce ministry offers decided to sit after that Sunday to fix the price of edible oil as part of efforts to keep carefully the industry stable, Commerce Minister Tipu Munshi told The Daily Star yesterday.
"The meeting will take up the BTTC survey in addition to the ideas of the authorities concerned. I wish a decision will be studied that evening," he said.
According to the National Panel of Revenue, there exists a demand around 17 lakh tonnes of edible oil in the united states yearly and imports encounter 94 % of the demand.
About 16 lakh tonnes of crude soybean and crude palm oil were imported in the 2019-20 fiscal year.
Additionally, refined soybean and refined palm oil happen to be also imported but the quantity is negligible.
Some 8.23 lakh tonnes of crude soybean and palm oil worth Tk 5,033 crore was bought in the first half a year of fiscal 2020-21, down from 10.63 lakh tonnes worth Tk 5,432 crore in the same period the prior year, according to info from Chattogram Custom House.
