Edible Oil Prices May Come Down As Govt Slashes Custom Duties Ahead Of Festive Season

The cut in customs duty on these cooking oils will result in an estimated revenue loss of Rs 1,100 crore.

New Delhi: In a move to check rising edible oil prices during the festival season, the base custom duties on palm, soyabean, and sunflower oils have been reduced further, bearing a revenue loss of Rs 1,100 crore, the government said on Saturday.

What prompted the cut in custom duties?

Global prices and domestic prices of edible oils have been under pressure during 2021-22 raising serious concern from inflation as well as consumer. “Import duty on edible oils is one of the important factors that impacted landed cost of edible oils and thereby domestic prices,” said the Food and Consumer Affairs Ministry.

Industry experts believe that the move would bring down retail prices by Rs 4-5 per litre, according to news agency PTI.

What are the effected changes in edible oil prices?

Under the latest direction, the custom duties will be reduced on both crude and refined variants of three cooking oils, according to a release by the Consumer Affairs, Food & Public Distribution. However, the agri-cess on crude palm oil has been increased from 17.5 per cent to 20 per cent, it said.

The finance ministry has notified the cut in customs duties of these oils effective from September 11 till further orders.

According to the finance ministry notification, the base import tax on crude palm oil has been reduced to 2.5 per cent from 10 per cent, while the tax on crude soyabean oil and crude sunflower oil has been reduced to 2.5 per cent from 7.5 per cent.

As a result of the above cut, the effective duty on crude palm oil, crude soyabean oil and crude sunflower oil will come down to 24.75 per cent, whereas effective duty on refined palm oil, soyoil and sunflower oil will be 35.75 per cent.

Import duty on edible oils witnessed a cut earlier and the recent cut is aimed to boost domestic supply and check price rise. The cut in customs duty on these cooking oils will result in an estimated revenue loss of Rs 1,100 crore including the additional estimated Rs 3,500 crore revenue loss from earlier reduction of custom duties on these oils. The total loss of Rs 4,600 crore will be borne and expected to be passed on to the consumers, it added.

Solvent Extractors' Association of India (SEA) executive director B V Mehta told PTI that the fresh round of cut "could bring down the retail prices by Rs 4-5 per litre."