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Cama faults ministry on cooking oil prices

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John Kapito

Consumer rights watchdog, the Consumers Association of Malawi (Cama), has blamed the Ministry of Trade for what it calls failure to decisively act on companies that are not reducing prices of cooking oil following the scrapping off of a 16.5 Value Added Tax (VAT) on the commodity.

Cama Executive Director John Kapito was reacting to a “final warning” that Trade Minister Mark Katsonga Phiri issued over the weekend that his ministry would deal with cooking oil suppliers and retailers for not lowering prices of the commodity.

According to the statement, consumers have also been asked to report suppliers who have not reduced the prices to the ministry for what it calls urgent action.

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But in an interview, Kapito rated the fresh warning as an empty effort that “does not make sense to any consumer”.

He said the ministry has instruments to punish non-complying traders; as such, it could just have indicated the right selling prices.

“They must have an indicative price that they are informing the public to be asking when they go onto the market. Until today, they have failed to demonstrate that,” Kapito said.

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He urged the ministry and the Malawi Revenue Authority to ‘pounce’ on traders found charging VAT while it was already removed.

In a statement dated April 29 2022, Katsonga warns that “through the laws, drastic action will be taken” on traders that are not reducing the prices.

“The government expected that, by now, all the suppliers of edible oil should have ceased and desisted from charging VAT on the said cooking oil as per the gazette notice issued by the Ministry of Finance,” of the statement reads.

Cooking Oil Processors Association President Peter Ngoma refused to comment on the matter, saying he was yet to receive the communication from the minister.

Recently, cooking oil prices have increase, with two litre bottle hitting up to K7000 from about K4,500.

The prices have been increasing since the government introduced VAT on cooking oil, but the tax was then removed on April 1 this year.

Recently, the Competition and Fair Trading Commission issued cease and desist orders to five shopping outlets over elevated cooking prices.

Cooking oil companies have been reluctant to slash prices of the commodity following the removal of the 16.5 percent VAT.

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