Ministry of Trade and Industry says rising commodity prices have undermined the anticipated gains from the issuance of cooking oil import permits.
In a written response on Monday, the ministry’s spokesperson Mayeso Msokera said cooking oil prices have remained high despite opening the window for imports due to global fuel price surge and failure by local manufacturers to remove value added tax (VAT) on the commodity.
He said: “Issuance of cooking oil import licences is ongoing and progressing well. It has helped to stabilise supply of the product by making it less scarce.
“However, emerging factors such as the global fuel prices surge, which has also affected our economy have undermined the anticipated gains.”
Msokera said the ministry has launched investigations against some of the cooking oil manufacturers for their conduct and that should they be found on the wrong side of the law, they will be punished according to the provisions of the Competition and Fair Trading Act.
In May this year, the Ministry of Trade and Industry started issuing import licences to retailers to address excess demand and control surging prices.Over 15 traders were issued the licences.
Ministry of Finance and Economic Affairs had anticipated that following the removal of 16.5 percent VAT on cooking oil, the price of a two-litre bottle of Kukoma cooking oil would reduce from K7 108 to K5 638 while for Mulawe, a two-litre bottle was supposed to be selling at K5 250 from K6 000.
On the other hand, a two-litre bottle of Purola was expected to be selling at K4 958 from K5 818 while the same volume for Soyola was expected to cost K5 672 from K7 150. But prices have remained the same.
In an interview yesterday, Consumers Association of Malawi executive director John Kapito said that the directives made by government have not been enforced, as such, prices of the commodity have remain high.
“Now the prices are even much higher than the time government had set up minimum prices for cooking oil and one wonders why government had removed VAT on cooking oil since consumers have not benefited,” he said.