Dousing the kitchen fire

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There seems to be no end to the season of twin oil shocks in the country. While global crude oil prices and the government’s low-hanging-fruit policy to tax petro-fuels have resulted in a constant rise in the prices of petrol and diesel, the government has been proactive in slashing import duties on a variety of edible oils to try and rein in the runaway prices of all cooking oils in the country such as palm oil, vegetable oils, mustard oil, soyabean oil, sunflower oil. The move just at the beginning of the festive season will bring relief to a number of consumers.

The festive season of 2021 is perhaps worse than theta of last year. In 2020, we thought that the worst of the pandemic is over and the economy would be gradually revive. But this year, the country is just trying to recover after a savage run of the infection that snuffed out more lives compared to the first and experts are constantly cautioning us about an impending third one. Many people are still without jobs and the hardships are continuing in millions of families though a few encouraging indicators of revival are also showing up.

The rising edible oil prices come as a crude shock against this backdrop. Despite the burden of increased expenditure, the government took the step of making deep cuts in import tariff to offer relief in the price of this essential item. The administration has hoped that the price of a kg of any cooking oil would come down by Rs 15-20 due to this move. The only apprehension is that the duties have been brought down to such levels that if the global supply shortages persist, there won’t be much room to go for more rounds of tariff cut from here. Like crude, India imports an overwhelming share of its edible oil requirement and the dependence has not really gone down much despite the rise in domestic production of oilseeds at the farms.