Ministry to ‘not consider’ oil price hike proposal

The commerce ministry says it will not consider the recent proposal by traders to increase soybean oil prices by Tk 18 per litre.

Its Additional Secretary AHM Shafiquzzaman said on Thursday the ministry does not want to raise oil prices again before Ramadan.

Action would be taken against traders if they increased prices, he warned.

Soybean oil is now sold at Tk 168 per litre. Prices were hiked by Tk 8 per litre in the first week of February, but Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association wants another increase.

In its proposal submitted early this month, the association asked to set prices of bottled soybean oil at Tk 176 per litre at the mill gate, Tk 180 per litre at the distributor level, and Tk 186 per litre at the retail level.

It proposed setting the prices of a five-litre bottle of oil at Tk 850 at the mill gate, Tk 870 at the distributor level, and Tk 890 at the retail level.

Moreover, non-bottled palm oil prices were proposed to be set at Tk 150 per litre at the mill gate, Tk 151 per litre at the distributor level, and Tk 153 per litre at the retail level.

The association wants the new prices to take effect from this month.

The government earns Tk 17 in import duty for per litre oil sold at Tk 168 in the market, up from Tk 15 last year when prices were Tk 135 per litre.

Soybean import revenue was Tk 659 crore in the first seven months of the current fiscal year, up from Tk 382 crore during the same period in FY21.

Bangladesh’s annual demand for refined edible oil is about 28 lakh tonnes, and 90 per cent of this is imported. The country also imports about two lakh tonnes of inedible oil annually, which is used for different purposes.

Soybean oil accounts for about 40 percent of the edible oil demand while the share of palm oil is about 52 percent. Mustard and other oil types meet the rest of the demand.