Government asked to verify influx of cheap Iranian cooking oil – Journal

KARACHI: Producers have warned that the flood of cheap contraband Iranian cooking oil is not only affecting the market share of the local edible oil industry, but is also causing revenue losses to the public treasury.

A number of market players or middlemen, using social media platforms, have offered Iranian cooking oil and canola oil at Rs 240-325 per liter saying that “the prices are negotiable ”, while the cooking oil produced locally is sold between 380 and 400 Rs per liter. .

They have also shown their willingness to wholesale Iranian products only to small local producers of cooking oil. Demand for cheap Iranian oil has increased over the past month in Karachi and domestic markets due to a high tax of Rs 80 per kg or Rs 80,000 per tonne on import of edible oil in Pakistan.

The Pakistan Vanaspati Manufacturers Association (PVMA), in its letter of December 17, informed financial adviser Shaukat Tarin and the Director General of Pakistan Quality Control Authority (PSQCA) Ali Bux Soomro that due to from the high tax structure on the import of edible oil, the cross-border smuggling across porous borders flourished.

PVMA President Tariq Ullah Sufi and Senior Vice President Sheikh Amjad Rasheed said the dumping of Iranian oil caused loss of revenue to the national pot, but also affected sales of “Made in Pakistan” products. »In the domestic market. They stated that the contraband goods are uncertified and substandard oilseed products, posing a threat to human health, therefore, these products must be checked and stopped to be kept in stock and sold in accordance with the provisions of the PSQCA law of 1996 and the resulting rules.

They called on the provincial food authorities of Punjab, Sindh, Balochistan and Khyber Pakthtunkhwa to take note of this matter of public interest.

The attractive profit margins, available for the implicit and gray supply chain of contraband goods, suggest that the illegal practice is likely to flourish further if left unchecked, the PVMA said.

It is a universally accepted and experienced phenomenon that raw materials and finished products on which the incidence of duties / taxes and other levies is higher compared to regional and neighboring countries are subject to smuggling and therefore local industry. witnesses the same scenario, the association added.

Unfortunately, law enforcement agencies, tax offices, district administration and management authorities, as well as other registration and licensing regulators pay no attention to the question, therefore the legitimate, documented and fiscally obedient industry suffers severely and suffers irreparable financial losses by losing market share.

Mr Rasheed said the association had asked financial adviser Shaukat Tarin and chairman FBR for time to take action against the influx of Iranian oil to save the local industry.

A ghee / cooking oil producer said that since the Iranian product does not comply with the PSQSA standard, it could be harmful to human health.

He said the government should rescue the local industry which is already struggling due to the depreciation of the rupee against the dollar, the current gas crisis and high tariffs on edible oil imports.

PVMA Secretary General Umer Islam Khan said the low price of Iranian oil means there is no tax or duty on the product while the Iranian government also provides subsidies.

Regarding the government’s plan to reduce the general sales tax to 8.5% against 17% at the import stage of palm oil and oilseeds and to 50% reduction in import customs duties palm oil, he said “so far nothing has been done”.

He said Pakistan consumes 4.5 million tons of ghee and cooking oil per year. Imports of palm oil (the main raw material for the manufacture of edible oilseed products) amount to 3 to 3.1 million tonnes per year. In addition, 3.2 million tonnes of seeds are imported to extract 900,000 tonnes of canola and soybean oil. The industry extracts 400,000 tonnes of oil from cottonseed, rapeseed, canola and corn.

Posted in Dawn, December 26, 2021

Lee J. Murillo