LAHORE: Ghee and cooking oil are staple food items in Pakistan, forming an essential part of daily meals across the country. Recently, these commodities have seen a notable decrease in prices, providing much-needed relief to consumers amidst the ongoing economic challenges. However, there are concerns that these prices may soon rise again due to impending government policies linked to the upcoming federal budget for the financial year 2024-25.
Recent Decline in Prices
In recent weeks, the prices of ghee and cooking oil have decreased significantly. Specifically, both commodities have seen a reduction of Rs 75 per kilogram, offering a respite to the inflation-stricken public. This decline is a result of measures implemented by the new government aimed at curbing inflation and stabilizing the economy.
Current Prices
- Brand A Cooking Oil: Rs 525 per liter (after a drop of Rs 75)
- Brand A Ghee: Rs 525 per kilogram (after a drop of Rs 25)
- Brand B Cooking Oil and Ghee: Rs 380 per liter (after a drop of Rs 70)
The Impact of the Federal Budget 2024-25
Despite the recent price reductions, there are looming concerns about future price hikes. The federal budget for the financial year 2024-25 is expected to introduce new taxes and increase existing ones to meet the revenue targets set by the International Monetary Fund (IMF). The government aims to collect an additional Rs 2000 billion in revenue, a target that may result in increased taxes on essential commodities.
Potential Tax Increases
Reports suggest that the government may:
- Increase the sales tax rate by one percent.
- Implement other tax measures to generate the required additional revenue.
If these measures are approved, they will likely lead to higher inflation, subsequently affecting the prices of cooking oil and ghee. The proposed budget changes are set to take effect from July 2024, following parliamentary approval.
Future Price Predictions
Given the potential increase in sales tax and other fiscal measures, the prices of ghee and cooking oil are expected to rise. This anticipated price hike will reverse the current trend of declining prices and place additional financial strain on consumers.
Current price of cooking oil and ghee in Pakistan
Following the fresh changes, Brand A cooking oil is now priced at Rs 525 per liter after a drop of Rs 75, while Brand A ghee saw a drop of Rs 25.
Brand B ghee and cooking oil prices have dropped by Rs 70 to Rs 380 per litre.
