Edible oil stocks hit rock bottom as cooking oil industry calls for review of import volume – Business
The ghee and cooking oil industry has submitted a series of fiscal recommendations to Finance Minister Shaukat Tarin to immediately improve national edible oil stocks, which are currently at historic lows.
In a communication to the Minister of Finance and the Chairman of the Federal Board of Revenue (FBR) on Tuesday, Pakistan Vanaspati Manufacturers Association (PVMA) President Tariq Ullah Sufi highlighted the problems in the edible oil sector in Pakistan.
He informed that following a highly volatile international commodity market and an unsatisfactory/depleted domestic stock level of edible oil, an impending shortage of ghee/cooking oil in the coming months will not can be excluded. Therefore, the participants unanimously decided as follows to counter the prevailing unsustainable circumstances regarding the depletion of national stocks of edible oil: 90% must be suspended and allow for a 100% adjustment of the tax on sales through June 30, 2022, to improve the cash position of edible oil importers-manufacturers, as prices have spiked to around $1,750 per metric ton (PMT) C&F.
To mitigate the impact of customs duties and sales tax on the current exorbitant prices of edible oils, it is proposed that the import tariff price (ITP) of edible petroleum products, namely palm oil oil (CPO), RBD palm oil, RBD palm olein, sunflower and degummed crude soybean oil (CDSO) to be set at an average price in effect from July 1, 2021 to January 31, 2022 on purposes of collecting duties/sales tax/other taxes at the import stage.
This will help reduce the incidence of customs duty/sales tax and enable the industry to improve its cash flow, which is imperative in the current market scenario. The ITP or actual calculated and mutually agreed international market price (whichever is lower at the time of importation for the purposes of calculating duties/taxes) will be effective immediately and will be valid until June 30, 2022 , affirmed the president of the PVMA.
The PVMA Chairman said that the government will review the import volume by FATA/PATA units as there has been a huge distortion between their import volume and the consumption pattern.
The per capita consumption in Pakistan is 20 kg and the import volume of FATA/PATA should be related to the official population figures available in the Pakistan Economic Survey.
It was also proposed that all import levies/sales taxes for FATA/PATA units should also be collected at the import stage and refunded after due examination and verification of their consumption certificate.
To promote the culture of easy doing business and build trust among importers/manufacturers/refiners, coercive attitudes/actions can be removed and the Competition Commission of Pakistan (CCP) and Federal Board of Revenue (FBR ) may be directed to avoid issuing coercive opinions.
Tariq Ullah Sufi added that measures must be taken to curb the influx of Iranian-origin cooking oil smuggled into Pakistan, which not only deprives the government of necessary duty, but also undermines equal opportunities. .
The story was originally published in Business Recorder on March 2, 2022.