Govt shocks consumers with Rs213 per litre hike in cooking oil prices

Published June 1, 2022
Ghee/cooking oil manufacturers have stopped supplies due to non-payment of Rs2-3 billion by the Utilitiy Stores Corporation.—Dawn/File
Ghee/cooking oil manufacturers have stopped supplies due to non-payment of Rs2-3 billion by the Utilitiy Stores Corporation.—Dawn/File

KARACHI: The government on Tuesday shocked consumers by pushing up ghee and cooking oil rates by an unprecedented Rs208 and Rs213 to an all-time high of Rs555 per kg and Rs605 per litre, respectively, even though “these rates still do not exist in the retail markets.”

An official in the Utility Stores Corporation (USC) in Karachi confirmed to Dawn that the USC had issued a notification of this whooping jump in ghee and cooking oil rates effective June 1.

The official, however, did not comment as to why the rates had been jacked up so mercilessly which would hit the consumers badly.

The maximum rate of ghee and cooking of renowned brands in the retail markets still hovers between Rs540-560 per kg/litre.

Utility stores to begin selling ghee and cooking oil at Rs555 and Rs605, respectively; higher than ‘retail rates’

However, Pakistan Vanaspati Manufacturers Association (PVMA) Secretary-General Umer Islam Khan hinted that the retail rates of ghee and cooking oil would soon come on a par with USC prices.

He said ghee/cooking oil manufacturers have stopped giving the products on credit to the USC as the corporation had not cleared outstanding Rs2-3 billion to the manufacturers.

Mr Umer said the Prime Minister Task Force Committee on Supply of Palm Oil comprising officials of relevant ministries and PVMA office-bearers has been holding daily zoom meetings to analyse the demand and supply situation of palm oil.

He said around 160,000 tonnes of palm oil stocks are available at the twin ports of Karachi which are sufficient for three weeks of consumption. Despite the lifting of an export ban by Indonesia on palm oil on May 23, not a single loaded vessel had been on the high seas or at Indonesia port for shipments to Pakistan.

However, the PVMA had requested the government to remove 2pc additional customs duty on the import of palm oil from Malaysia to offset the high cost of Malaysian palm oil which is costlier by 15-20pc compared to Indonesia’s.

Around 87pc of Pakistan’s total palm oil imports originates from Indonesia and the rest is met from Malaysia.

When asked why ghee and cooking oil rates did not fall despite a drop in Indonesian palm oil rate to $1,700 from $1,900-2,000 per tonne two months back, Mr Umer said the shipments booked on higher rates and a massive rupee devaluation further raised the landing cost.

Commenting on rising freight charges, he said the PVMA in its circular on May 27 had intimated its members to pay the transportation charges for their edible oil consignments to NLC/private tankers with an increase of only 22.50pc after a jump of Rs30 in diesel to Rs174.67 per litre. The increase in transportation charges is applicable on both upcountry and Karachi delivery of edible oil.

Published in Dawn, June 1st, 2022

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Short-changed?
Updated 24 Nov, 2024

Short-changed?

As nations continue to argue, the international community must recognise that climate finance is not merely about numbers.
Overblown ‘threat’
24 Nov, 2024

Overblown ‘threat’

ON the eve of the PTI’s ‘do or die’ protest in the federal capital, there seemed to be little evidence of the...
Exclusive politics
24 Nov, 2024

Exclusive politics

THERE has been a gradual erasure of the voices of most marginalised groups from Pakistan’s mainstream political...
Counterterrorism plan
Updated 23 Nov, 2024

Counterterrorism plan

Lacunae in our counterterrorism efforts need to be plugged quickly.
Bullish stock market
23 Nov, 2024

Bullish stock market

NORMALLY, stock markets rise gradually. In recent months, however, Pakistan’s stock market has soared to one ...
Political misstep
Updated 23 Nov, 2024

Political misstep

To drag a critical ally like Saudi Arabia into unfounded conspiracies is detrimental to Pakistan’s foreign policy.