Soybean oil prices have increased in the wholesale market even though the government is yet to give consent to the refiners' plea to hike prices of the essential commodity.

Refiners earlier sought to increase prices of soybean oil citing increased VAT burden as the reduced VAT benefit expired on March 31.

Traders said that despite the absence of a formal announcement, supply shortages and market speculation are pushing up consumer costs.

The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association has been lobbying for a price increase since the expiry of the reduced VAT facility on edible oil on March 31.

The National Board of Revenue earlier cut VAT at the import stage to 5 percent and exempted payment of the indirect tax at domestic production and trading.

Following the end of the reduced VAT rate, a standard 15 percent VAT was reimposed.

Abu Bakar Siddique, an edible oil wholesaler at Karwan Bazar, one of Dhaka's largest kitchen markets, said the price of bottled soybean oil rose from Tk 175 to Tk 180 per litre since April 6, just after Eid-ul-Fitr. The price of a 5-litre bottle increased from Tk 852 to nearly Tk 900.

Prices of loose soybean and palm oil have also gone up at a similar pace, he added.

He claimed that refiners have not been accepting new orders for several days.

As a result, supply is falling short of demand, and he is currently selling from previously purchased stocks.

"Refiners say they won't take new orders until the new prices are fixed," he said. "If we sell at old rates, we'll incur losses."

However, Mohammad Bablu, a retailer at the same market, said prices have yet to increase at the retail level, but supply has dropped significantly.

"Right now, I'm receiving only 20 percent of my daily requirement," he said.

"Dealers say supply will normalise once prices are revised."

Meanwhile, a trader from Chattogram's Khatunganj wholesale market, requesting anonymity, said the price of soybean oil has increased over the past week.

"The price was Tk 6,000 per maund (37.5 kilogrammes) a week ago. Now it's Tk 6,500," he said, adding that retail prices have gone up by Tk 10 per litre.

Abul Hashem, an edible oil wholesaler in Moulvibazar, one of the major wholesale commodity markets in Dhaka, said ten days ago, the price of bottled soybean oil was Tk 175 per litre, which has now increased to Tk 185.

Loose soybean oil prices have also risen from Tk 157 per litre to Tk 162-163, he said.  

The price of palm oil increased from Tk 140 per litre a week ago to Tk 144-145, he added.

Bangladesh's annual demand for edible oil stands at 24 lakh tonnes, around 90 percent of which is met through imports, according to data from the Bangladesh Trade and Tariff Commission.