The exemption on import duties for edible oil is set to expire on March 31, prompting traders to propose a price hike of 18 Taka per liter for bottled soybean oil and 13 Taka per liter for loose oil.
On Thursday, refinery owners submitted this request to the Chairman of the Bangladesh Trade and Tariff Commission.
The request was submitted on behalf of the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association by Nurul Islam Molla.
Proposed Price Changes:
Bottled Soybean Oil: 193 Taka per liter (previously 175 Taka) and loose soybean and palm oil: 170 Taka per liter (previously 157 Taka).
The proposed price increase is 18 Taka per liter for bottled soybean oil and 13 Taka per liter for loose soybean and palm oil.
The proposal states that the new prices will take effect from April 1.
End of Tax Exemptions and Impact on Prices
To keep prices stable before Ramadan, the government had provided tax exemptions on import duties and VAT for edible oil, but this facility expires on March 31.
As of now, the government has not announced an extension of the exemption. Refinery owners have preemptively announced the price hike in response.
Edible oil traders claim that if the VAT exemption is extended, prices will remain unchanged. However, if the tax exemption is lifted, import costs will rise, leaving no option but to increase prices.
Last November and December, the government waived VAT on import, production, and trade of edible oil to ensure affordability before Ramadan.
The deadline for these benefits was later extended to March 31. The Bangladesh Trade and Tariff Commission had recommended extending the import duty exemptions until June 30 and sent a letter to the Chairman of the National Board of Revenue (NBR) requesting the extension.
However, the NBR has yet to make a decision on continuing the exemptions.
Given this uncertainty, the traders' association has informed the government about their decision to increase prices ahead of the Eid holidays.
In the letter submitted to the Bangladesh Trade and Tariff Commission, traders mentioned that from April 1, soybean and palm oil will be subject to a 15% VAT, which necessitates price adjustments.
Government Decision Will Determine Final Price
Shafiqul Atahar, Director of TK Group, stated that a request has been sent to the National Board of Revenue (NBR) to reconsider withdrawing the tax exemption. If the government continues the duty exemption, there will be no further price hikes.
