Blitz Bureau
NEW DELHI: Consumers can expect a dip in edible oil prices in the coming weeks, as refiners begin passing on the cost savings from the government’s recent customs duty cut.
A report by CareEdge released Tuesday highlights that this move follows a May 30 announcement lowering import duties on crude edible oils. The Ministry of Consumer Affairs has also stepped in, directing oil companies to slash Maximum Retail Prices (MRPs) and report weekly Price-to-Distributor (PTD) rates.
With food inflation easing to 2.8% in May and a stronger-than-usual monsoon on the horizon, these factors are likely to support the downtrend in edible oil prices.
The government’s decision to increase the duty gap between crude and refined edible oils is also a major factor. The basic customs duty on crude palm oil now stands at 10%, while the duty on refined oil remains 32.5%, widening the effective differential to 19.25% from 8.25%.
This shift makes it more attractive for domestic refiners to import crude oil rather than refined oil, helping them boost capacity utilisation and improve refining margins.
India imports around 55–60% of its edible oil needs, mainly from Indonesia and Malaysia. In the oil year 2023–24, imports totalled about 15.96 million tonnes, with palm oil making up 55% of the total. For the first seven months of 2024–25 (November to May), imports stood at around 1.07 million tonnes.
According to the Indian Vegetable Oil Producers’ Association (IVPA), refined palm oil imports spiked from 0.458 million tonnes in Q2FY25 (June–September 2024) to 0.824 million tonnes between October 2024 and February 2025 — about 30% of total palm oil imports — following a duty hike on crude palm oil in September 2024.
Refined palm oil has also been cheaper than crude palm oil by about $45–50 per tonne due to lower costs and freight charges, further boosting refined imports. Export policies from supplier countries, which often tax crude oil higher than refined oil, have added to this trend.
Data from the Solvent Extractors’ Association (SEA) of India shows palm oil imports surged 84% in May 2025 month-on-month to 0.59 million tonnes — the highest since November 2024 — as refiners took advantage of lower prices compared to soybean and sunflower oils.
Overall, the market shift and policy support are paving the way for relief at the checkout for Indian households.