The move appears to have been necessitated by the virtual disappearance of groundnut oil from the markets here, and an anxiety to ensure sufficient supply for the festival season.

At a meeting with State Civil Supplies Minister Jaspal Singh, representatives of oil millers and traders reportedly told the minister that it was not possible for them to adhere to the voluntary price ceiling. The Government also agreed to allow them to purchase as much groundnut stock and oil as they could from other states.

Sources in the State Civil Supplies Department apprehend that the decision to free the groundnut oil prices and allow producers and traders to purchase groundnuts and oil from other states may result in further escalation of edible oil prices. ``The measures may not onlyescalate groundnut oil prices, but also encourage millers and traders to indulge in rampant profiteering,'' a senior official in the department told The Indian Express.

Singh had, at the behest of Chief Minister Keshubhai Patel, convened a meeting of oil millers in Rajkot in the last week of June, where the Minister extracted an assurance from them that to voluntarily slash groundnut oil prices from Rs 51 to Rs 47 per kg.

However, edible oil prices continued to soar, providing Opposition parties a ground for criticism of the BJP Government. Groundnut oil was priced at Rs 37 per kg before the BJP assumed power in March. Prior to the Rajkot meeting, the issue of the groundnut price rise had resulted in some unpleasantness between the Civil Supplies Minister and the Chief Minister, when Singh attributed the price rise to Patel's decision to lift the ban on inter-State movement of groundnut seeds and oil.

Later, the Chief Minister quickly issued a rebuttal to Singh's remarks, contending thatartificial restrictions or controls had failed to check edible oil prices in the past.