The price of soybean oil has surged by Tk 14 per liter after more than a week of discussions between the government and edible oil producers and distributors. The new rate was officially announced on Sunday through a press release by the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association, and the revised price is effective immediately.

According to the new pricing, consumers will now pay Tk 189 for a one-liter bottle of soybean oil, up from Tk 175. The price for a five-liter bottle has also seen a significant increase, rising to Tk 922 from the previous rate of Tk 852. In addition to bottled oil, the prices of unpackaged soybean and palm oils have also been adjusted. The new price for these oils stands at Tk 169 per liter, whereas it was previously Tk 157.

This latest hike comes a few months after the last price adjustment on December 9, when the rate for bottled soybean oil was raised to Tk 175 per liter. The decision to increase prices again follows a proposal submitted by refinery owners on March 27, just ahead of Eid. At that time, they had proposed a Tk 18 per liter increase for bottled soybean oil and a Tk 13 increase for loose soybean oil. They also announced that the new rates would take effect from April 1, following the expiration of VAT benefits on edible oil imports.

Producers have cited the end of VAT concessions and a rise in global prices as the primary reasons behind the need for a price hike. The association communicated this intention to both the Ministry of Commerce and the Bangladesh Trade and Tariff Commission in writing, prompting a series of meetings between the government and business stakeholders to discuss and negotiate the proposed increase.

It has been revealed that, prior to the last Ramadan, the government had granted tax exemptions on edible oils to keep prices within reach for the general public. These tax reliefs expired on March 31, leading to renewed calls from producers for a price revision. Following the Eid holidays, discussions resumed at the beginning of last week, with multiple meetings held on Sunday, Tuesday, Wednesday, and Thursday. During these meetings, the government and business representatives deliberated on whether the new price should exceed Tk 190 per liter. However, no final decision was reached until this Sunday’s announcement.

Meanwhile, even before the producers formally submitted their price hike request, the Bangladesh Trade and Tariff Commission had already recommended to the National Board of Revenue (NBR) that the VAT exemption on edible oil imports be extended until June 30. The NBR has yet to respond to this recommendation.

In its press release, the Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association explained that, in order to maintain market stability for this essential product, the government had previously reduced VAT on both refined and crude soybean and palm oil imports from 15% to 5%. Additionally, VAT exemptions were granted on local production and distribution. These exemptions expired on March 31. With the expiration, standard VAT rates have been reinstated at both the import and production levels, which has significantly increased the overall cost of edible oil.

Taking this into account, the association stated that the actual market-adjusted price should be Tk 198 per liter. However, in consideration of consumer affordability, they have applied a Tk 9 discount, setting the new retail price at Tk 189 per liter.

This price adjustment reflects the combined impact of the end of government tax relief measures and an upward trend in the international edible oil market. The final price has been negotiated after several rounds of consultations between producers and the government to ensure a balanced outcome for both industry stakeholders and consumers.