LAHORE: The Federal Government is considering fixing the prices of ghee and cooking oil on the open market by exercising the powers of the Comptroller General of Prices (CGP), as ghee manufacturers have yet to pass on the profit from the reduction in RBD prices on consumers.
The prices of ghee and cooking oil of category A brands are still at Rs 580/kg/litre while those of category CD are above Rs 400/kg/litre as the international price RBD has fallen to 1050 $/ton.
The Federal Secretary of the Ministry of Industry and Production also has the power of Comptroller General of Prices and may fix the prices of any goods under the law. The notified rate of CGP is applied by the Provincial Secretaries of Industries, who also have the power of CGP. Recently, the power of the PMU has been exercised in the case of sugar prices as they spiral out of control.
According to data available with The News, the price of ghee and cooking oil is not expected to exceed Rs 375/kg/litre considering the import price of RBD $1050/ton. The landed cost of RBD palm oil at $1,050/tonne is Rs 294,477/tonne.
Federal Secretary of the Ministry of Industry and Production (MoIP), Imdadullah Bosal, speaking to The News, said that ahead of Eid, PVMA was asked to submit its costing formula and its price notification to the ministry. In addition, the chief secretaries of the four provinces were invited to submit the situation of market prices, stocks and availability of ghee. The Security and Exchange Commission of Pakistan (SECP) is also requested to submit the cost of ghee manufactured. “We have asked the PVMA to pass on the reducing impact of the RBD import price to consumers. Otherwise, strict measures will be taken,” Bosal said, adding that the chief secretaries had been asked to implement the reduced prices. He said the government was not in favor of taking strict measures as it created distortions in the market. But if the industry did not pass on the impact, there would be no other option.
Meanwhile, industry sources have confirmed that the MoIP secretary, who also leads the Prime Minister’s Ghee/Cooking Oil Task Force, has already warned the industry to bring prices down.
PVMA Chairman Tariqullah Sufi said the prices of ghee and cooking oil have started to fall in the domestic market. He claimed that a price of 16kg ghee tin had fallen to Rs 8,000-8,400 at factory level. This means that the consumer price is Rs 550 maximum per kg. The price will continue to decline in the coming days as the RBD $1050/tonne is the August supply price while the current supplies are made from imported RBD oil at $1600/tonne. He claimed that the factories were suffering losses. But that was part of the business, he said, adding that factories could not keep prices up due to stiff market competition.
On the price of ghee/cooking oil in the range of Rs 375/kg/litre considering the import price of RBD$1050/tonne, he said the prices of premium brands would come down to that level in August when the mills produced ghee/cooking oil according to the imported price. He claimed that marketers were not transmitting the impact to the public.