Govt asks industry to cut edible oil prices by Rs 8-12 per litre as global prices drop

The Centre on Friday directed edible oil associations to further reduce the maximum retail price (MRP) of major edible oils by Rs 8-12 per litre with immediate effect, in line with the global market.

"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, chaired by food secretary Sanjeev Chopra, with the industry representatives.

Price to distributors by the manufacturers and refiners also needs to be reduced with immediate effect so that the price drop is not diluted in any way, it said.

It was also impressed upon that whenever a reduction in price to distributors is made by the manufactures/refiners, the benefit should be passed on to the consumers by the industry and the ministry may be kept informed on a regular basis, it added.

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 Solvent Extraction Association of India and 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.

In the meeting, the ministry said the international prices of imported edible oils are continuing on a downward trend and therefore, the edible oil industry needs to ensure that the prices in the domestic market also drop commensurately.

The industry was told to ensure the price drop in the global market is passed on expeditiously to the end consumers and not in a delayed manner as is observed now.

"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.

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 cost. However, the edible oil prices in the international market are witnessing a fall since mid-june 2022, it said.

"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 side, the industry informed that the global prices of different edible oils have fallen by $150-200 per tonne in the last two months and they have reduced the MRP and will further reduce shortly.

"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.

Earlier also the ministry had convened a meeting with the leading edible oil associations and over a month the MRP of refined sunflower oils and refined soybean oil of some major brands were decreased by Rs 5-15 per litre. Similar decrease has been done in case of mustard oil and other edible oils as well.

The reduction in oil prices came in the wake of reduction of international prices and reduced import duty on edible oils making them cheaper. The industry was then advised to ensure that the entire benefit of the reduced international prices be passed on to the consumers invariably, the ministry added.

Other issues like price data collection and packaging of edible oils were also discussed in the meeting.