Government asked to monitor flow of cheap Iranian cooking oil – Newspaper

KARACHI: Producers have warned that the flood of cheap smuggled Iranian cooking oil is not only affecting the market share of the domestic edible oil industry but also causing revenue losses for the treasury.

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

They also expressed their desire to sell Iranian products in large quantities only to small local producers of cooking oil. The demand for cheap Iranian oil has increased in the last month in Karachi and local markets due to the high tax of Rs 80 per kg or Rs 80,000 per ton on importing edible oil in Pakistan.

Pakistan Vanaspati Manufacturers Association (PVMA) through its December 17 letter has informed Financial Adviser Shaukat Tarin and Director General of Pakistan Standard Quality Control Authority (PSQCA) Ali Bux Soomro that due to the high tax structure on import of edible oil, – smuggling has flourished across the porous border.

PVMA Chairman Tariqullah Al-Sufi and Senior Vice Chairman Sheikh Amjad Rashid said that dumping Iranian oil is causing loss of revenues for the National Fund but also affecting sales of “Made in Pakistan” products in the local market. The contraband is edible oil products that are not certified and non-standard, and therefore pose a threat to human health, they said, so these products should be checked and discontinued for storage and sale under the terms of the 1996 PSQCA Act and the rules set there.

They called on regional food authorities in Punjab, Sindh, Baluchistan and Khyber Paktunkhwa to pay attention to this issue of public concern.

Attractive profit margins, available to the undocumented and grayed supply chain of contraband, suggest that the illegal practice may thrive if left unchecked, the PVMA said.

It is a globally accepted and experienced phenomenon that raw materials and finished goods on which the ratio of duties/taxes and other charges is higher compared to regional and neighboring countries are prone to smuggling, so the local industry is experiencing the same scenario, correlation has been added.

Unfortunately, the law enforcement agencies, tax offices, administration and regulatory authorities in the region, along with other registration and licensing regulators, do not pay any attention to this issue, so the legitimate, documented and taxable industry suffers badly and suffers irreparable financial losses through the loss of market share.

Mr. Rashid said the association sought time from financial advisor Shavkat Tarin and FBR chief to take any action against the flow of Iranian oil in order to save the local industry.

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

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

PVMA Secretary General Omar Islam Khan said that the low price of Iranian oil means that there are no taxes or duties on the product while the Iranian government also provides subsidies.

On the government’s plan to reduce the general sales tax to 8.5 percent from 17 percent in the stage of importing palm oil and oil seeds and 50 percent of customs duties on importing palm oil, he said, “Nothing has been done so far.”

He said Pakistan consumes 4.5 million tons of ghee and cooking oil annually. The import of palm oil (the main raw material for the manufacture of edible oil products) is three to 3.1 million tons annually. Besides, 3.2 million tons of seeds were imported to extract 900 thousand tons of canola and soybean oil. The industry obtains 400,000 tons of oil from cottonseed, rapeseed, canola and corn.

Posted in Dawn, December 26, 2021

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