March 16, 2022
DHAKA – Even though the government on Monday partially removing VAT on edible oils, consumers have yet to get any relief as traders have not reduced prices as of yesterday.
The government waived the 15 percent VAT at production and five percent at retail to reduce prices of soybean and palm oils amid an outcry over the spiralling cost of essentials.
The finance ministry yesterday said VAT on imports of refined and crude edible oils, mainly soybean, would be cut to five percent from 15 percent. The National Board of Revenue will issue a notification in this regard, according to Gazi Towhidul Islam, public relations officer of the finance ministry.
But the benefit of such measures was not evident at the capital’s Karwan Bazar kitchen market yesterday.
“I am waiting for the price to drop,” said Monu Mia, who bought a one-litre bottle of soybean oil. Usually he buys a five-litre container.
A five-litre container was selling for Tk 795. There was no loose soybean oil available there.
Trading Corporation of Bangladesh (TCB), which compiles market prices data in Dhaka city, showed that loose soybean oil was unavailable in the market.
It said the prices of one-litre bottled soybean oil remained unchanged from the previous day while 5-litre containers were also selling at Tk 780-Tk 800 yesterday, like the day before. The government-fixed price for 5-litre containers is Tk 795.
“Both supply and sales have been reduced greatly. But retailers like me are at a loss as we have purchased oil from distributors at higher prices during the rise in demand,” Mohammad Gofran, owner of Cumilla General Store at Karwan Bazar kitchen market, told The Daily Star.
Mohammad Yousuf, owner of Yousuf General Store, said, “We have to count our losses, if we sell soybean oil at the labelled price. On the other hand, the magistrates fine us if we sell at a higher price.”
The situation was similar in the capital’s New Market yesterday.
Distributors at the two markets said almost all companies have greatly reduced supply.
Amir Hossain, a distributor of Rupchada Soybean oil at Karwan Bazar, said, “We have been supplying each 5-litre can for Tk 785 so far after the company increased the rate. Now there is no supply from the company. It may resume tomorrow [today].”
Currently, consumers pay Tk 26-Tk 30 VAT per litre of bottled soybean oil at the government-fixed price of Tk 168 per litre, refiners said on Monday.
Ghulam Rahman, president of Consumers Association of Bangladesh (CAB), told The Daily Star yesterday, “It will take time to get the result of the tax exemption.”
After exempting the taxes, the government may revise the edible oil price considering the price in the global market, he added.