ISLAMABAD, Feb 5: Consumers are set to receive another shock as leading packer will increase the rates of cooking oil and ghee by at least Rs5 per kg in the next few weeks on the back of rising international edible oil price.

The imported palm oil prices reached to Rs3,700 per 37.5 kg on Monday from Rs3,300 previous week. The ghee/oil price had already been raised by at least Rs4 per kg last week.

Official figures compiled by the Federal Bureau of Statistics show the average retail price of ghee/oil between Rs125 to Rs128 per kg across the country. Of these the tax component is around Rs25-30 per kg, which increased from Rs19 in the year 2006, indicating heavy taxation on an essential kitchen item.

Former chairman of Pakistan Vanaspati Manufacturers Association Shaikh Amjad Rashid told Dawn that the price would increase further as imported palm oil prices witnessed robust growth during the last few months.

With this increase in the imported palm oil prices, an official source said the share of GST had gone up to Rs13,000 per ton from Rs4,000 over the past few weeks. The manufacturers pass on this increase in the GST to the end consumer pushing up the retail price.

To reduce the impact of surge in international prices, India has reduced the import duty on oil three times to pass on lesser impact to consumers while there has been no change in tax structure of oil industry in Pakistan for the last three years.

Mr Rashid said that the canola oil imported price also increased to Rs4,050 from Rs3,800, which will also increase retail price for end consumers after the arrival of new production.

Asked about the reason for steady increase in oil prices, he said that the use of palm oil for bio-fuel by the producing countries had pushed prices in the international market. He said that to discourage exports, there were reports that Indonesia was considering to impose regulatory duty on palm oil export. An importer of edible oil told Dawn that Indonesian exporters were asking for the duty concession Pakistan had given to Malaysian palm oil exporters under the FTA.

FTA with Malaysia gives a leverage of $17 in duty on import of per metric ton palm oil to Pakistan as compared to that of Indonesia.