Edible Oil Import Duty Cut to Ease Prices

• Crude sunflower oil BCD cut from 10% to nil.
• Soybean and palm oil BCD reduced to 5%.
• 19.25% duty differential retained for crude and refined oils.
• Industry asked to pass the benefit to consumers.

GG News Bureau
New Delhi, 24th Sept: The Government has reduced the Basic Customs Duty (BCD) on major crude edible oils to help moderate domestic prices and ease inflationary pressures arising from higher international edible oil prices.

The BCD on crude sunflower oil has been reduced from 10% to nil, while the duty on crude soybean oil and crude palm oil has been cut from 10% to 5%.

The Government has also reduced the applicable BCD on the corresponding refined edible oils while maintaining a 19.25% import duty differential between crude and refined edible oils.

The duty rationalisation takes into account the rise in international edible oil prices and the resulting increase in domestic landed costs and retail prices. Import duties form a component of the landed cost of imported edible oils and can therefore influence domestic market prices.

According to the Government, the reduction in BCD on crude edible oils is expected to lower their landed cost and facilitate the transmission of the benefit through the domestic supply chain. The measure is aimed at providing consumer relief and helping contain food-price and overall inflationary pressures.

Differential retained to support domestic refining
The Government said the duty differential between crude and refined edible oils has been maintained to encourage the utilisation of domestic refining capacity and discourage excessive imports of refined oils.

The measure is also intended to provide a level playing field for domestic refiners and support value addition within the country.

Industry asked to pass on benefit
The Government has advised edible oil associations and industry stakeholders to ensure that the benefit of the import duty reduction reaches consumers.

Industry stakeholders have been asked to revise Price to Distributors (PTD) and Maximum Retail Price (MRP) in line with the reduction in landed costs. Edible oil associations have also been requested to advise their members to implement corresponding price reductions without delay.

The Government said it will continue to monitor international edible oil markets and domestic prices and take appropriate measures, as necessary, while balancing consumer interests with the interests of farmers and the domestic edible oil industry.