As Ramadan approaches, concerns are mounting over a significant price hike in ghee and cooking oil due to delays in the clearance of edible oil shipments. The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) President, Atif Ikram, has warned that if the situation is not resolved swiftly, consumers will bear the brunt of escalating costs.
Import Delays and Rising Costs
The import of edible oil has hit a roadblock due to sluggish clearance processes at the customs department. According to Atif Ikram, importers have been forced to pay millions of dollars in demurrage fees as their shipments remain stuck at ports. These additional costs are expected to trickle down to consumers, pushing ghee and cooking oil prices higher just as demand surges ahead of Ramadan.
The clearance process of edible oil is taking an unusually long time, with shipments being held up for more than ten days due to customs clearance issues,said Atif Ikram. This inefficiency is not only burdening importers but will also make essential kitchen items unaffordable for the masses.
Millions Lost in Demurrage Fees
One of the biggest concerns raised by the FPCCI is the excessive demurrage charges being levied on edible oil imports. These fees, paid in US dollars, are significantly inflating costs, which will inevitably be passed on to consumers.
“Millions of dollars are being lost due to these delays. Importers are facing massive financial losses, and if immediate action is not taken, these expenses will lead to higher prices of ghee and cooking oil in the local market,” Atif Ikram emphasized.
With Pakistan already grappling with inflation, any further rise in essential commodities will add to the financial strain on households. Given that Ramadan is a time of increased food consumption, a spike in ghee and oil prices could create additional hardships for citizens.
Government Intervention Needed
To address the crisis, Atif Ikram has announced that he will meet with key government officials, including the Finance Minister and the Chairman of the Federal Board of Revenue (FBR), to discuss the urgent need for streamlining the customs clearance process.
“We cannot afford unnecessary delays. I will personally raise this issue with the Finance Minister and FBR officials next week. The government must step in to prevent further escalation in prices before Ramadan,” he stated.
Customs Agents Strike Adds to Woes
Another factor complicating the clearance process is the planned strike by customs agents, who have announced that they will halt operations on the 22nd of this month. This move could further delay shipments and exacerbate the crisis.
If the strike goes ahead as planned, importers will face even longer wait times, and additional demurrage fees will pile up. The FPCCI is urging the government to intervene and find a solution before the situation spirals out of control.
Potential Impact on Consumers
The looming price hike in ghee and cooking oil could have far-reaching consequences for the average consumer. As an essential ingredient in Pakistani households, any sharp increase in prices will hit lower- and middle-income families the hardest.
Moreover, the timing of this crisis could not be worse. During Ramadan, demand for cooking oil and ghee surges as people prepare meals for Sehri and Iftar. If prices rise unchecked, it will create significant financial difficulties for families already struggling with high inflation and economic uncertainty.
Call for Immediate Action
The FPCCI has urged the authorities to take swift action to prevent an avoidable crisis. Key recommendations include:
- Expedited Customs Clearance: The customs department must accelerate the clearance process to avoid prolonged delays and additional costs.
- Waiver of Demurrage Fees: Given the current crisis, authorities should consider waiving or subsidizing demurrage fees to relieve financial pressure on importers.
- Resolution of Customs Agents’ Strike: A proactive approach is needed to resolve the dispute with customs agents to prevent further disruptions.
- Price Monitoring & Regulation: The government should ensure that price controls are in place to prevent unjustified price hikes that exploit the situation.
With Ramadan just weeks away, the FPCCI’s warning serves as a critical wake-up call. If immediate steps are not taken to resolve the clearance bottleneck, ghee and cooking oil prices will inevitably rise, adding further strain on Pakistani households.
The government must act decisively to ensure that customs clearance processes are streamlined, demurrage fees are controlled, and consumers are protected from unnecessary price hikes. The coming weeks will be crucial in determining whether Pakistanis will face yet another financial burden during the holy month.
