Rising oil prices hit festive food budgets

• Vegetable oil prices have jumped nearly 20 per cent in the last year
• Global supply issues and biodiesel shifts drive up import costs
• Government may cut import duties to provide festive relief to users

The aroma of freshly fried puris, samosas, and sweets is the essence of India’s festive season. But this year, the rising cost of a key ingredient—vegetable oil—is casting a shadow, forcing families to watch their budgets more closely.

An Essential Ingredient for Celebrations

From Diwali to Dussehra, food is central to how India celebrates. Much of this celebratory cuisine, from savoury snacks to intricate sweets, relies heavily on deep-frying or generous use of cooking oil. It is more than just a cooking medium; it is a vehicle for flavour, tradition, and joy. The demand for edible oils like palm, soybean, and sunflower oil naturally surges between September and November as households prepare for these annual feasts. This makes any fluctuation in oil prices particularly noticeable during this period, turning a kitchen staple into a significant line item on the festive shopping list.

Why Your Cooking Oil Bill Is Climbing

The price of vegetable oil has jumped by nearly 20% in the last year, a pinch felt by millions. This increase isn't due to a single cause but a combination of global and domestic factors. India is the world's largest importer of vegetable oils, sourcing nearly two-thirds of its needs from countries like Malaysia, Indonesia, Argentina, Russia, and Ukraine. This heavy reliance makes domestic prices highly sensitive to international events. Geopolitical disruptions, such as the conflict in Ukraine, and extreme weather events have impacted the supply of sunflower and other oils. Furthermore, major producers like Indonesia and Malaysia are diverting more palm oil towards producing biodiesel, reducing the amount available for export as food. This links the price of your cooking oil directly to global energy policies.

The Government's Balancing Act

In response to the rising prices and ahead of the festive season, the Indian government is considering measures to provide relief. One of the main tools at its disposal is adjusting import taxes. Currently, the government is reportedly weighing a cut in the basic import duty on vegetable oils to help lower retail costs. However, this is a delicate balancing act. While cutting taxes can bring immediate relief to consumers, it can also hurt the interests of domestic oilseed farmers by making cheaper imports more attractive. Officials are also aware that a cut in Indian import duties can sometimes lead to a price rise in exporting countries, which limits the benefit for Indian households. A similar move in May 2025 saw global prices climb shortly after the duty reduction.

Stretching the Festive Budget

For many families, the higher prices mean making difficult choices. Some may be forced to reduce the quantity or variety of special dishes they prepare. Others might switch to more affordable oil brands or change their cooking methods to use less oil. Refiners have already been stocking up ahead of the festive demand, with soyoil imports hitting a record high in August as it became more price-competitive against other oils. This highlights how even at the industrial level, cost is driving purchasing decisions. While the festive spirit is resilient, the financial strain is undeniable, turning what should be a time of abundance into a period of careful calculation for household budgets across the country.