Edible oil refineries are creating an artificial crisis in the market through a number of irregularities, including scaling down supply, not delivering even after taking orders, keeping refinery units shut and arbitrarily labeling higher prices than those set by the government. A five-member supervisory team of the Directorate of National Consumer Rights Protection has found the irregularities after visiting six refineries in the country around mid-March and recommended legal measures against them.
The supply started to drop from February when it was 17,164 tonnes and until 19 March the supply volume was only 6,310 tonnes. The team filed a probe report with the commerce ministry on 3 April, stating that S Alam Super Edible Company kept their refinery units shut and reduced supply significantly in January and February despite having a stock of crude oil. The company also intentionally delays delivering products for days after taking orders. Other refineries – City Edible Oil Ltd, Bangladesh Edible Oil Ltd, Shabnam Vegetable Oil Industries Ltd, Meghna and United Edible Oils Refinery Limited and Bashundhara Oil Refinery Mill – also reduced supply in March compared to the previous month, creating a supply crunch of edible oil at the retail market.
Not only the refineries, but also dealers and wholesalers were involved in the irregularities, including stockpiling of edible oil and price hikes, the probe body found, and also recommended legal action against them. The edible oil refineries are seeking permission to increase soybean oil price by Tk 12 per litre, citing the context of rising prices in the international market. With the supply going down steadily, the retail market is in serious shortage of oil causing consumers to suffer.
To control the edible oil market, the government slashed 5% VAT at the consumer level, 15% at the production level and 10% at the import stage. Soon after that the price of bottled soybean oil was reduced from Tk 168 to Tk 160. To prevent such an artificial crisis in future, the government should strengthen the market monitoring system.
