Hoor Asrar is deeply worried about the escalating price spiral
There is hardly a price hike refuses to abate any doubt that the current unstoppable price hike is self-created in its nature and content. It is now quite clear that this process is the handiwork of local manufacturers, wholesalers and service providers who apparently have nothing to fear and are callous enough to fleece their compatriots. The most troubling aspect of the issue is that the government appears to be taking cosmetic measures only to control the prices in the absence of a price and profit assessment and regulation mechanism, leading to record-high rates of commodities unbearable for the common man. It has become crystal clear that there is no capable mechanism for price control as it is practically free-for-all, as the vendors keep on increasing prices virtually every day with a gay abandon as if they wish to enrich themselves overnight. They are even not conscious that increasing prices may well depress the demand and it will become difficult for them in the long run.
It is common knowledge that the increasing price spiral creates a situation where businesses take advantage of a crisis to charge excessive prices for basic necessities and are engaged in selling goods significantly above their usual price. The result is that the inflation rate in Pakistan has climbed to an unprecedented 21.32 per cent, the highest in around 14 years and this swift climb is unprecedented as until April, the rate was 14.6 per cent. In this context it was reported that cooking oil selling for Rs.540 per litre jumped up to Rs.580 in a matter of just a week. The vendors blamed the increase in POL prices and other issues for the new price without much justification. It is not only the price of cooking oil but excessive prices are charged for other commodities, including flour, rice, pulses and edibles and the reason given is of rising petrol prices. It is quite obvious that the pretext cited for price increase that of escalating transport cost is not very valid as it is very well-known that hoarding of various commodities to create artificial shortage in the open markets and earning more profit is the cogent factor behind this deliberate price hike.
While on one hand prices continue to sky-rocket, the restrictions on business hours of open markets have also provided an opportunity to shopkeepers to fleece customers and charge exorbitant rates. It has been observed that some shops, especially those selling drinks and cigarette corners and utility stores remain operational even after the 9pm restriction on business hours in connivance with the police or the district administration. High prices can be partially managed by counterchecking manufacturers’ claim of the high cost of production due to exchange rate parity, world prices and soaring freight rates. Unfortunately, the previous government never called upon powerful food item makers to justify price hikes, thus giving them a free hand to increase prices without fear and the same freedom was also enjoyed by retailers and market forces. High prices have also forced people from low-income groups to restrict purchases while others are taking up small loans to meet their requirements.
Already the comparison between the price levels of the last four years present a horrendous scenario when it is observed that the cooking oil now selling over Rs.500 per litre as compared to Rs.180-200 four years ago. A 10 kg flour bag now costs Rs.800 as compared to Rs.350 while chapati and naan prices have swelled to Rs.12 and Rs.15-20 per piece from Rs.6-7 and Rs.10 per piece respectively. Sugar price has seen a phenomenal jump up to Rs.140 per kg last year while it has now settled at Rs.85 per kg but it was much lower at Rs.65 per kg in August 2018. Gram pulse, Moong and Masur are now priced at Rs.160-200, Rs.160-220 and Rs.210-240 per kg as compared to Rs.95, Rs.90 and Rs.80 per kg respectively. Huge imports of wheat and sugar also could not bring any price relief.
The new coalition government is facing a tough job to control the price spiral and to curb the intensity of already high food prices as any meagre fall in rates, up to 50 per cent, will prove to be peanuts for consumers. In this connection it is pointed out that the price cannot be reversed instantly. The new government should focus on increasing the production of local crops, especially wheat and sugarcane. This will help bring down prices, lower dependence on imports and create an exportable surplus. Experts mention that the prices can be brought down gradually by controlling the rupee fall and diesel prices besides making plans to boost the productivity of local crops. The new government needs to manage wheat and sugarcane crops, while strictly checking smuggling and hoarding that was rampant during the previous government’s tenure. TW