Rice prices increase across Pakistan

Ghee, Oil prices likely to increase

Pakistan Vanaspati Manufacturers Association (PVMA) has issued an alert that the prices of ghee and cooking oil might see a surge between Rs. 10 and Rs. 15 per kilogramme.

The association has attributed the anticipated hike in prices to alterations in the sales tax mechanism made in the federal budget.

According to Sheikh Umer Rehan, PVMA’s chairman, the inclusion of the Third Schedule would cause a transition from the existing to a maximum retail price-based sales tax regime. He further explained that such an alteration would bring about an increased burden on the industry due to taxes.

Furthermore, he said that the increased tax burden would be transferred to the customers. Thus, the prices of ghee and cooking oil would go up at the consumer level.

Rehan stated that the industry was already heavily taxed. He said that PVMA had requested the government to cut down taxes on edible oil and ghee in the budget to keep the prices affordable for the consumers.

On the contrary, he noted that the changes made in the budget had increased the burden of money on the producers.

But he said that the measures would rather increase financial burdens on the producers. He stated that this would make both ghee and cooking oil expensive for the people.

PVMA added that the imposition of sales tax would alter the entire process of collection. The new method will use the maximum retail price method, which will result in higher liabilities on the part of the producers. This will affect the price stability in the market.

PVMA called upon the government to reconsider its decision and grant relief through budgetary measures. It said that reduced taxation can lower food prices for consumers. It also pointed out that the edible oil industry needs such supportive policies in order to keep its prices low.