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Rising oil prices worry consumers

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The Consumers Association of Malawi (Cama) has called for an investigation into rising prices of cooking oil, which it believes are exorbitant and unjustified.

Cooking oil prices have been rising sharply in the recent past and manufacturers attribute it to re-introduction of Value Added Tax (VAT) on the product.

A press statement from the consumers’ watchdog, however, says attributing the rise in prices to the re-introduced VAT is misleading.

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Cama says their investigations have established that, before the re-introduction of VAT in October 2020, a 500-milliliter bottle of cooking oil was selling at K520 but immediately after the re-introduction of VAT it went up by 50 percent to K790, which is not in line with the 16.5 percent VAT.

“We appeal to authorities to investigate why cooking oil manufacturers are operating as an association whose interest is to fix market prices and control the distribution and sales of their products on the market,” reads the statement.

Cama has also noted that the rise in cooking oil prices is a result of other factors including the rise in crude oil prices on the international market.

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Capitol Oil Refining Industries Limited Executive Director Ameen Karim maintained that, as much as there are other factors which have led to the rise, they are burdened by VAT which makes the country’s oil more expensive than smuggled oil.

“Crude oil price have indeed gone up internationally and Malawi and neighbors have not been spared but for us we have a double burden which is the re-introduced VAT which our neighboring countries do not have and we will continue lobbying with government to consider removing it,” he said.

Up on the re-introduction of VAT, manufacturers collect input VAT from Malawi Revenue Authority.

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