9/15/04 INDIA (Oilmandi) - Consumers will pay less for edible oils afterWednesday. The government has decided to lower the tariff value or thebase price on which duty is imposed on edible oils to stem inflationarypressures. The new rates will be announced on Wednesday.
Tariff values will be adjusted and new prices announced tomorrow, financeminister P Chidambaram said after a meeting with Prime Minister ManmohanSingh and commerce minister Kamal Nath.
Edible oil carries high weightage in wholesale price index and anylowering in its price will help arrest inflation. India imports over halfof its edible oil needs each year, valued at some Rs 8,745 crore.
Indications are that tariff values on edible oils could be lowered by 10%,but finance ministry officials declined to comment. The fixed base priceor tariff value is revised in accordance with the international prices ofthe commodity. With global prices of edible oils dropping by an average of$100 per tonne, the cut in tariff value has been long overdue.
Tariff value which was introduced primarily to check under-invoicing ofimports is the assessable value on which the revenue authorities computecustoms duty. Traders pay duties on imports, whose value is calculatedusing these base prices and not the actual prices at which they purchaseoil.
The last revision in the tariff value on the palm complex was on November14, 2004 and for crude soyabean oil on May 31, 2004. The existing tariffvalue for crude palm oil (CPO) is $504 per tonne, $543 for refinedpalmoil, $532 per tonne for crude palmolein and $552 for refinedpalmolein.
Against this, international prices are now ruling at $430 per tonne forcrude palmoil, $465 per tonne for refined palmoil and $475 per tonne forrefined palmolein. In the case of crude soyabean oil, the tariff value nowis $628 per tonne against the international price of $556 per tonne.
The edible oil industry has been demanding an immediate cut in the baseprice to curb inflation, which is at a four-year high of 8.33%. Inflationrose to 8.33 % in the week ended August 28, even after the duty cuts onpetro products and steel.
Finance minister P Chidambaram told reporters on Monday that thegovernment was monitoring the price behaviour of four products polymers,edible oil, raw sugar and furnace oil —and would take corrective action tocheck price rise.