The Union government issued a notice on Tuesday that it has lifted restrictions on how much edible oil stocks wholesalers can store. The decision was made due to a surge in global supplies and stable domestic prices.
The government announced that they will no longer enforce the limit on certain fats and oils. The new law is aimed at making the shortage more manageable – mainly, by increasing supply and reducing demand.
The government limits stock in order to prevent people from buying a lot of it for personal use, which can contribute to inflation. Not allowing these stocks reduces the amount of inventory available in retail stores and helps control inflation.
One of the main contributors to high prices for cooking oil this year is a worldwide shortage which has been caused by war and viruses. Ukraine, India and Russia are the three major counties that produce edible oils.
As the prices for edible oils are starting to go back down, the Ministry of Consumer Affairs revised its current stock limit order.
The government conducted a study and found that the need for traders of retail goods to be exempt from the stock control order was justified. Larger retailers and wholesalers currently have much more lenient restrictions, and stock replenishment in city limits is only possible once every day, according to the announcement.
In May, the Union government announced they would allow two million tonnes of soybean and sunflower oil to be imported from duty-free countries for their next financial year. High prices in vegetable oils this year have been a heavy burden on household budgets.
According to the U.S. Department of Energy, India imports around 8 million tons of palm oil per year and it makes up nearly 40% of their country’s total edible oil consumption. It is also used in household cooking for products like butter and Western dishes such as macaroni and cheese as well as in virtually all manufactured food items, from noodles to ice cream.