Govt Asks Firms To Slash Edible Oils Price By Rs 8-12 Per Litre In Line With Global Prices

As global market rates for edible oils have come down, the government has asked edible oil firms to reduce the MRP of major edible oils by Rs 8 to 12 per liter with immediate effect.

The government has asked edible oil associations to reduce the maximum retail price (MRP) of major edible oils by Rs 8-12 per litre with immediate effect as per the global market rates, reported PTI. Department of Food and Public Distribution Secretary Sanjeev Chopra on Friday held a meeting with the representatives in this regard. The government has also asked manufacturers and refiners to reduce the price to distributors with immediate effect so that the price drop is not diluted in any way. "Some companies which have not reduced their prices and their MRP is higher than other brands have also been advised to reduce their prices," the food ministry said after a meeting, as per PTI. 

"The leading edible oil associations were advised to take up the issue with their members immediately and ensure that the maximum retail price (MRP) of major edible oils to be reduced further by Rs 8-12 per litre with immediate effect," the ministry said in a statement released after the meeting.

According to the report, the ministry told the representatives that whenever a reduction in price to distributors is made by the manufacturers or refiners, the benefit should be passed on to the consumers by the industry and the ministry may be kept informed on a regular basis. 

With the edible oil prices continuing to show a downward trend and set to witness further reduction by the edible oil industry, the ministry said, "the Indian consumers can expect to pay less for their edible oils. The falling edible oil prices will help in further cooling inflation fears if any."

Industry representatives including the Solvent Extraction Association of India and the Indian Vegetable Oil Producers' Association were present in the second meeting convened within a month to discuss further reduction in retail prices of edible oils amidst a continued fall in the global prices.

The edible oil companies must make sure that prices on the local market decrease proportionately to the continued decline in international prices of imported edible oils, the ministry stated during the meeting. They were also instructed to make sure that the price decrease in the worldwide market is quickly passed on to the final customers, rather than slowly as is happening right now.

The ministry said that the international and domestic prices of edible oil were on an upward swing during 2021-22 due to many geopolitical factors including higher input and logistic costs. However, the edible oil prices in the international market are witnessing a fall since mid-June 2022. 

"The fall in the prices of edible oils in the domestic market is gradually being reflected in the domestic market. However, the government feels the associations can further reduce the prices and provide relief to the consumers," it noted.

On the other hand, the industry said that over the past two months, the price of various edible oils has decreased by $150–200 per tonne globally. As a result, the MRP has been reduced and will soon be further reduced.

"However, there is an element of time lag for reflection in the retail markets and the retail prices are soon expected to come down further," the industry said.

The ministry had earlier called a conference with the top edible oil associations, and over the course of a month, the MRP of several big brands' refined soybean and sunflower oils was reduced by Rs 5 to Rs 15 per litre. The reduction in mustard oil and other culinary oils has also been made.

Following a drop in global pricing and lower import taxes on edible oils, which made them more affordable, the price of oil also fell. The industry was then told to guarantee that consumers always receive the full advantage of the decreased worldwide costs.