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Govt Mulls to Forcefully Reduce Oil and Ghee Prices Under Law

The government is seriously considering invoking the Price Control and Prevention of Profiteering & Hoarding Act, 1977, to forcefully notify the reduced prices of ghee and cooking oil in the next 48 hours.

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It is reliably learned that the shortage of ghee and cooking oil is expected in the coming days because clearances of all imported edible oil consignments have been stopped by the importers, who are waiting for FBR’s notifications on reduced duties and taxes on the import of edible oil after Monday’s announcement of Minister for Planning and Development, Asad Umar.

Reliable sources told Propakistani that the Ministry of Industries & Production has warned the industry to reduce prices in the next 48 hours in the absence of the FBR’s notifications on reduced rates of duties and taxes on the import of edible oil.

This measure would be taken to forcefully reduce prices of ghee and cooking oil despite the fact that the Federal Board of Revenue (FBR) has not issued SROs for any reduction in duties and taxes as announced by the Minister for Planning and Development, Asad Umar on Monday. Asad Umer’s announcement of the reduction in sales tax and customs duty and additional customs duty (ADC) on the import of edible oil is not practically possible till the FBR issues relevant notifications.

The FBR’s notifications would only be applicable on the future import and clearance of the edible oil. This reduction cannot be applicable to the existing stocks of ghee and cooking oil available in the markets. The industry cannot reduce prices of the ghee and cooking oil on the existing stocks in the market. The consignments to be cleared on the reduced rates of duties and taxes are only possible after the issuance of the SROs by the FBR. The existing products of ghee and cooking oil in the market would be sold on the existing prices because these items have consumed edible oil at higher rates of duties and taxes applicable on already cleared past consignments.

Sources stated that the Ministry of Industries & Production is in the process of invoking the provisions of the Price Control and Prevention of Profiteering & Hoarding Act, 1977 without relaxing the fact that the prices of edible oil have considerably increased in the international market. The government has also warned the industry to submit final work in the next 48 hours to avoid issuance of the notification on the price reduction by the Ministry.

According to Asad Umer, the international prices of edible oil increased by 48% as compared to a 38 percent increase of the same commodity in the domestic market. On the other hand, the industry opined that this statement of Asad Umer has endorsed the statement of the industry that relief has been passed on by manufacturers over and above landed cost.

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In a letter to the industry on Monday, the Ministry of Industries & Production stated in pursuance of powers vested under Section 5 of S.R.0.1062(1)/2021, and in exercise of the powers conferred by sections 3 and 4 of the Price Control and Prevention of Profiteering & Hoarding Act, 1977, the Controller General of Price has directed all producers of Ghee Manufacturers to refer to the consultative meeting held on Monday and to state that edible oil costing is enclosed herein for industry’s perusal.

The industry’s comments/views along with supporting documents in this regard must reach the office of Controller General of Pakistan latest by October 20, 2021, before 12.00 noon, positively, warning of the Ministry of Industries & Production added.

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