NEW DELHI : The Union government on Friday asked edible oil companies to cut oil prices by ₹15 per litre, in a context of reducing bottlenecks in international supply.
This follows a sharp drop in prices around the world, driven by Indonesia’s decision to lift the palm oil export ban. Cooking oil prices have risen since the Russian-Ukrainian war broke out earlier this year, with the Black Sea region accounting for more than 75% of global sunflower oil exports before the war. India’s vegetable oil import bill jumped over 63% in FY22 from the previous year.
The Consumer Affairs Department said global edible oil prices fell by $300 to $450 a tonne in the past month, but the decline in domestic prices was “gradual”. However, the industry has argued that changes in retail prices reflect with a lag.
“The Ministry of Food and Public Distribution, in a meeting on July 6, directed the major edible oil associations to ensure the reduction of the MRP (maximum retail price) of edible oils in ₹15 with immediate effect. The Center has also indicated that the price to distributors by manufacturers and refiners must also be reduced immediately so that the price cut is not diluted,” the ministry said in a statement on Friday.
A Mother Dairy spokesperson said the company had reduced the MRP of Dhara Soybean Oil and Dhara Rice Bran Oil by as much as ₹14 per litre, which will be available on the market by next week. “We expect a reduction in the MRP of sunflower oil in the next 15-20 days,” the spokesperson added.
Adani Wilmar, who sells edible oils under the Fortune brand, said he already reduced the MRP of his Fortune line of edible oils by almost 15% a few weeks ago. “Given the drop in global prices, we will pass the benefits of reduced raw material costs on to consumers in the coming days,” said Angshu Mallick, Managing Director of Adani Wilmar Ltd.
Earlier in May, the government allowed duty-free imports of 2 million tons a year for crude soybean oil and crude sunflower oil.
The relief on edible oils will be effective until March 2024.
The ministry said companies must without fail pass on the benefits of reduced edible oil duties and significantly lower world prices to end consumers.
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