adminThe government has officially raised the retail price of bottled soybean oil by Tk14 per litre, bringing the new price to Tk189—up from the previous Tk175. The revised price of a five-litre bottle now stands at Tk922, a Tk70 increase from the previous Tk852. Meanwhile, the prices of loose soybean and palm oil have been increased by Tk12, now fixed at Tk169 per litre.
The announcement was made on Tuesday by Commerce Adviser Sheikh Bashir Uddin following a meeting at the Ministry of Commerce on edible oil import, supply, and pricing. This marks the first price adjustment since December 9, 2024.
The adviser explained that the decision came after careful consideration of international market trends, the expiry of VAT exemptions, and consultations with the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association, which had proposed a Tk18 increase for bottled soybean oil and Tk13 for loose oil. The government, however, settled on a more modest hike.
Sheikh Bashir Uddin emphasised that the increase is temporary. “We believe the current price rise is a necessity, but it’s not permanent. With increased supply and market competition, prices will come down in the near future,” he told reporters.
The VAT exemption that helped keep edible oil prices lower expired on March 31. Initially reduced from 15% to 10% in October, and further to 5% in November, the waiver saved consumers approximately Tk2,000 crore in recent months. However, the adviser stated that the government could not continue foregoing such a large amount of revenue considering its operational expenses.
“Until now, the government was waiving about Tk550 crore per month. But continuing this is not feasible in the long run,” he said.
Based on the Tariff Commission’s pricing formula and global price indicators, the cost of bottled soybean oil could have gone up to Tk197 per litre, but a compromise was reached with refiners to keep the price at Tk189.
To stabilise the market and reduce import dependency, the government is working to expand local production and diversify supply. The commerce adviser mentioned that out of the 3 million tonnes of edible oil required annually, 700,000 tonnes come from local mustard seeds. Additionally, 600,000 tonnes of rice bran oil have recently been introduced to the market, and the Sena Kalyan Sangstha has also started supplying oil to boost competition.
“Two new companies have recently entered the edible oil production sector, and two to three more are expected to begin production within the next few months,” he added. “Such moves will increase supply and foster competition, which should help reduce pressure on soybean oil, especially as demand for palm oil typically rises during warmer months.”
When asked about the delay in the decision, the adviser noted that the government had taken time to carefully assess the market situation. He acknowledged that extending the VAT exemption further was considered, but it was ultimately deemed too sensitive from a fiscal standpoint.
Responding to queries about rising rice prices, Sheikh Bashir Uddin said the trend has persisted for some time but expressed hope for relief soon. “The new Boro paddy will enter the market in two weeks, particularly impacting prices of finer varieties like Miniket and Najir. We expect this to bring rice prices down to more affordable levels.”
