In recent times, the skyrocketing prices of edible oil have been spoiling the kitchen budget of the common man. In September 2024, the government increased the import duty, after which the prices of oil also increased in the international market. The result? The oil used in the kitchen became more expensive, which increased the expenses in every household. But now the Central Government has given great news of relief.
The government has reduced the basic customs duty (BCD) on crude edible oils from 20% to 10% directly. This reduction will apply specifically to crude sunflower, soybean, and palm oil. With this unprecedented decision, the difference in import duty between crude and refined oils has increased from 8.75% to 19.25%. Let us know how this reduction will have a direct impact on your kitchen and when will you be able to get cheap oil!
Why was the duty reduced on crude oil
For the last few months, the prices of edible oils have been continuously skyrocketing. In September 2024, the government increased the import duty to promote domestic industry. But this decision had the opposite effect. Oil prices also increased in the international market, and the combined effect of these two was that the prices of edible oils in India increased further. There was an outcry in the kitchen of the common man; people started thinking twice before buying a bottle of oil.
Given this situation, the central government has now taken a historic decision to reduce the customs duty on crude edible oils from 20% to 10%. This reduction will apply specifically to crude sunflower, soybean, and palm oil. These oils are used on a large scale for cooking in India. The government believes that this step will bring down oil prices and provide direct relief to consumers, reducing the burden on their pockets.
What does the increase in duty difference mean
Now let us understand what it means for the duty difference between crude and refined oils to increase from 8.75% to 19.25%. This is the oil that is imported directly and has not yet been refined. This is the oil that is already processed and ready for direct use.
Earlier the difference in duty between crude and refined oils was only 8.75%. That is, the import of refined oil was not very expensive. But now the government has reduced the duty on crude oil to increase this difference to 19.25%. This simply means that importing refined oil will now become more expensive.
Due to this change, companies will now prefer to import crude oil and refine it in India itself. This step will give a tremendous boost to the refining industry in the country, increase employment opportunities, and reduce dependence on imports of refined oils. Also, due to the reduction in duty on crude oil, the prices of refined oil can also come down, which will directly benefit the consumers.
How will the benefit reach consumers
The government has clearly stated that the full benefit of this duty cut should reach the consumers. For this, special advice has been issued to the organizations and stakeholders associated with the edible oil industry. This advice states that oil prices should be reduced so that the common man can get its direct and immediate benefit.
Will the prices come down
This question is in everyone’s mind. The government has reduced the duty, but will the oil companies pass on this relief to the consumers? It has often been seen that the industries keep the benefit of duty cuts or other relief to themselves and the prices do not come down.
But this time the government has shown strictness and has given clear instructions that the prices have to be reduced. However, how effective it will be, only time will tell. It is hoped that this initiative of the government will increase competition in the market and there will be a real reduction in prices, which will provide real relief to the general public.