24/10/2008 (The Hindu), Chennai - The retail price of palm oil sold through fair price shops under the special public distribution system has been reduced from Rs. 40 a litre to Rs. 35.

Chief Minister M. Karunanidhi issued an order with a view to controlling prices of essential commodities in the State, according to an official release issued on Thursday.

The move would cost the government an additional Rs. 5 crore, according to an official in the Food and Civil Supplies department. Between April and September, 6.2 crore pouches of oil of one litre each were sold.

At present, the State government provided a subsidy of Rs. 5 per litre as the cost of procurement of the edible oil was Rs. 45 per litre after taking into account the Central government subsidy. [The Centre gives a subsidy of Rs. 15 per kg. In respect of palm oil, one litre is equivalent to 910 grams].

Recently, the government placed an order for 46,000 tonnes of palm oil with the Project Equipment Corporation, a Central government enterprise designated for Tamil Nadu to import and supply palm oil. This quantity would be sufficient until March, the official said.

The edible oil would be supplied to the State at a rate of Rs. 32 per kg. After taking into account the cost of packing, the retail price would come to around Rs. 36 per litre. So, the government requested the Centre to bear some more portion of the cost. If the Union government acceded to the State’s request, the administration would pass on the benefit to people by bringing down the cost further, he said.