The Indian government is likely to announce a 10 percent cut across the board in base import prices of all edible oils to check rising inflation, a senior finance ministry official said on Wednesday.
India, the world's largest edible oil importer, buys palm oils mainly from Malaysia and Indonesia and soyabean oil from Argentina and Brazil. The official, who did not wish to be identified, told reporters the cut would be notified on Friday and said the move was part of the government's plan to curb domestic inflation.
Finance Minister Palaniappan Chidambaram said on Tuesday the government would change the base import price of edible oils used to calculate tariffs, in a fresh move to check record inflation.
India's wholesale price inflation has spiralled to a 3-1/2 year high of 8.33 percent for the year to August 28, pushed up by high global oil prices. Traders have been expecting a cut in base import price of edible oils after the government slashed duties on petroleum products and steel to rein in inflation.
India fixes base prices to check the government's revenue losses due to under-invoicing by some importers. Traders pay import duties on base values irrespective of the prices at which they purchase oils.
The last revision on palm oils was made in November last year. For crude soyaoil, the base price was last changed in May 2004. The existing base price for crude palm oil is $504 per tonne.
For refined, bleached and deodorised palm oil, it is $543 per tonne, for crude palm olein it is $532 per tonne and for crude soyabean oil it is $628 per tonne. Traders say international prices of these oils were much lower than base prices.
They have been seeking a cut in base prices for months. The finance ministry official said the government would lose revenue of 6-7 billion rupees due to the cut. He ruled out any change in existing import duties on edible oils.
Comments
Comments are closed.