How much the oil price to go down

The finance ministry decided to reduce the amount of Value Added Tax (VAT) from 15 per cent to 5 per cent in importing soybean and palm oils.

Over the decision, National Board of Revenue (NBR) will issue a gazette soon, confirmed the finance ministry on Tuesday.

Businessmen said if the portion of VAT is brought down to 5 per cent, the price of edible oil will decrease around Tk 12 per kg. However, it completely depends on the amount of expenditure for the import.

The businessmen had to spend between Tk 118 and Tk 122 per kg to import unrefined soybean oil via Chattogram port. They claimed the cost will go up to around Tk 127 for the upcoming consignment.

As the government has decreased the VAT on oil import, the expenditure will drop to around Tk 12. However, after the clearance from the port, the oil now is going to the market paying 15 per cent of VAT. So, it will not be possible to sell oil in reduced price.

Therefore, questions arise as to how far the reduction of VAT will impact the oil market.

The month of Ramadan will come to bring fresh consignment of oil by paying 5 per cent of VAT. The Ramadan will begin in the first week of April.

Finance ministry public relation officer Gazi Towhidul Islam on Tuesday told Prothom Alo that the National Board of Revenue (NBR) will issue a gazette over the decision, which will remain effective until 30 June.