LAHORE - The government has decided for making taxes adjustments to bring the sky rocketing prices of edible oil and ghee down in the open market, sources told The Nation here Tuesday. The sources said that Planning Commission and Federal Board of Revenue (FBR) had been given task to draft separate recommendations for tax adjustments on the import and local consumption of edible oil so that people could get these essential products at reasonable prices. The sources said the Ministry of Industries and Production was of the view that tariff structure at import level needed to be rationalised to offset increase in price due to surge in palm oil prices at international level, particularly after 10 per cent reduction in import duty on the product under Pakistan-Malaysia Free Trade Agreement (FTA). The ministry of industry sources confirmed that the ministry had also floated an idea that customs duty should be reviewed every 15 days as is being done in India to ensure that the impact of increase in palm oil prices is not reflected in the domestic edible oil/ghee prices, the impact of which has been calculated around Rs 500 million per month, the sources maintained. The sources said the ministry has forwarded these recommendations to the federal government after close monitoring of wholesale and retail markets on daily basis. The Industries Ministry has confronted with the FBS of the prevalent prices, which did not indicate real increase in edible oil and ghee prices. The ministry also cautioned the government that import of palm oil from Indonesia would decline, which may create monopolistic market resulting in its increase from Malaysia. The government had already been informed that at present 215 ghee units were functioning in the country, of which 155 were unauthorised, but the government did not take any action against them despite having complete information of their involvement in manufacturing of sub-standard products, the sources added. It as also informed that at present the supply of ghee was satisfactory, but the price of palm oil in the international market was rising rapidly, which would substantially affect the prices of ghee and edible oil. Sources said that 20,000 tons of ghee was being supplied to the Utility Stores Corporation (USC), which was selling it at Rs 130 per kilogram whereas its market price was hovering around Rs 155-140 per kilogram. The cabinet was further told that in the world market the prices of palm oil had increased due to extraordinary buying by China and decrease in the production of Malaysian palm oil. The Industries Ministry expects that demand of edible oil would increase not only for edible oil purposes, but for other uses also. The main reasons for increase in demand are said to be use of edible oil, oilseed for production of bio-diesel due to high price fossil fuel, new uses in Olea-chemicals, international pacts like Kyoto Protocol under which 38 industrialised countries commit to reduce greenhouse by 5.2 between 2008 and 2012. Another reason was the European Union (EU) has set itself a target of increasing bio-fuel in energy consumption to 5.75 per cent by 2010.