Edible oil prices fall thanks to tax cut

NEW DELHI:  Edible oil prices have come down after the central government slashed the basic duty on crude palm oil, crude soyabean oil and crude sunflower oil from 2.5 per cent to nil. Major edible oils players, including Adani Willmar and Ruchi Industries, have cut wholesale prices by Rs 4 -7 per litre. Prices have been reduced to give relief to consumers during festival season.

The other players that have reduced the wholesale prices of edible oils are Gemini Edibles & Fats India, Hyderabad, Modi Naturals, Delhi, Gokul Re-foils and Solvent, Vijay Solvex, Gokul Agro Resources and NK Proteins. Despite international commodity prices remaining high, intervention by the government has led to reduction in edible oil prices, said officials.

However, the prices are still higher than that of the corresponding period in previous year. The government is taking steps to improve the production of secondary edible oils, especially rice bran oil, to reduce dependence on imports. The Centre on Friday said the agri cess on these oils has been brought down from 20 per cent to 7.5 per cent for crude palm oil and 5 per cent for crude soyabean oil and crude sunflower oil.

Consequently, the total duty is 7.5 per cent for crude palm oil and 5 per cent for crude soyabean oil and crude sunflower oil. The basic duty on RBD palmolein oil, refined soyabean and refined sunflower oil has been slashed to 17.5 per cent from the current 32.5 per cent, said a senior official from the Ministry of Consumer Affairs.

The agricultural infrastructure cess on all kinds of crude edible oils was 20 per cent. Post reduction, the effective duty on crude palm oil will be 8.25 per cent, while it will be 5.5 per cent each for crude soyabean and sunflower oils. 

To control prices of edible oils the government has rationalised import duties on palm oil, sunflower oil and soyabean oil. Also, futures trading in mustard oil on NCDEX has been suspended and stock limits have been imposed.