``It is the perception of the department that reduction of the landed cost of import oils by Rs 3,000 a tonne would have a salutary impact on the domestic oil prices,'' an official press release said here.

Currently, edible oil imports are subject to a duty of 25 per cent. The government had observed two major factors for the steep rise in edible oil prices during the last four months. Mustard crop in the rabi season was estimated to have slid 10 per cent lower than the initial estimates.

On the other hand, import of edible oil under OGL had slowed down due to abnormal rise in global edible oil prices. International edible oil prices have risen on financial instability and civil unrest in Indonesia, a major supplier of edbile oils in the global market, it said. The hardening of the dollar against south-east Asiancurrencies had also increased landed cost of imported edible oil.

The governmetn is also considering restoring the storage control order for oilseeds and edible oil if prices do not stabilise.