Govt notifies hike in edible oil import duty

The Finance Ministry on Tuesday notified the hike in import duty on refined edible oils to 10 per cent from 7.5 per cent earlier.

The increase will widen the duty differential between crude oil and refined oils to 7.5 per cent from 5 per cent now.

Currently, the import duty on crude oil is 2.5 per cent.

Industry view The refining industry had been demanding a hike in import duty on refined oils as a lower duty differential of 5 per cent had led to surge in imports of refined oils in the recent past.

This had lead to under-utilisation of domestic refining capacity.

In 2013, imports of refined oils shot up by 52 per cent compared with 2012 on account of lower duty differential.

Refined oil imports Refined oils accounted for 29 per cent of the 8.34 million tonnes (mt) of edible oil imported into the country last year.

In 2012, refined oils accounted for 20 per cent of total imports.

Domestic refiners believe that the latest duty hike on refined oils is unlikely to benefit them.

“It is too little and is not going to ease the sufferings of the industry,” said B.V. Mehta, Executive Director of the Solvent Extractors Association of India.

A minimum duty differential of 10-12 per cent would have helped, Mehta said.

Edible oil imports In the oil year ending October 2013, India’s edible oil imports stood at 10.38 mt.

During November, the imports of refined oils were up 173 per cent at 2.08 lakh tonnes (lt) against 76,519 tonnes in the corresponding period a year ago.

Total edible oil imports during November were up 37 per cent at 9.27 lt (6.76 lt).