ISLAMABAD: The government has taken a serious notice of the ghee/cooking oil industry’s blatantly selling their products in the local market at higher prices despite a downtrend in the international palm oil markets as inflationary pressures are expected to escalate in the wake of floods.
The floods severely disrupted supply chains and now it is feared that the Sensitive Price Index (SPI) figure might cross 50 percent and Consumer Price Index (CPI) 25 percent mark.
The prices of palm oil in the international market fell massively by $1800/tonne in March 2022 to $1050/tonne in August 2022 but this benefit was not passed on to the domestic consumers accordingly.
A mere 3-4 percent decrease in the prices of ghee/cooking oil products drew the attention of the National Price Monitoring Committee (NPMC).
The committee directed the authorities to ensure the prices of ghee/cooking oil products in the domestic market are reduced in line with the international prices of the palm oil. The manufacturers argued the rising input cost did not allow them to reduce the prices accordingly in the domestic market.
The NPMC, which was recently handed over to the Ministry of Planning, said as to why the benefits of an improvement in exchange rate were not given to domestic consumers.
Independent economists believe that the shifting of NPMC under the jurisdiction of the planning ministry was a wrong decision because of many reasons. One of them is that the Pakistan Bureau of Statistics (PBS), which collects price data from all over the country, also falls under the domain of the same ministry so it would be in conflict of interest if the Planning Ministry issued any directives to PBS for bringing changes in methodology for collecting the data.
Secondly, there is an operational issue as now the Planning Minister would take a decision and then issue directives to the Ministry of Finance for preparing a summary for tabling before the Economic Coordination Committee (ECC) of the Cabinet for taking any immediate decision.
The NPMC was informed that the SPI figure was rising mainly because of a surge in electricity and petroleum prices in the domestic market. The SPI data shows that it went up by 44.5 percent year-on-year recently and it is all set to touch the 50 percent mark in the coming weeks in the aftermath of floods.
The CPI figure for August 2022 is going to be released today (Thursday) whereby it is expected to cross the 25 percent mark.
According to the official announcement released by the Ministry of Planning stating that in order to ensure the supply of food edibles and to maintain their prices after the floods in the country, the Ministry of Planning Commission has taken a lead while activating the National Price Monitoring Committee (NPMC).
The decision was taken on Wednesday during a meeting of NPMC after it was activated to monitor the essential commodities in collaboration with the provinces.
The meeting was chaired by the Federal Minister for Planning Development Professor Ahsan Iqbal and Minister of State for Finance Dr Aisha Ghaus Pasha. The Chief Economist, Chief Statistics Pakistan Bureau of Statistics PBS and other relevant stakeholders also attended the session.
In order to monitor the prices of essential commodities and to ensure their supply, the meeting of NPMC will be held every week, said the minister, while directing all the provinces to share their price mechanism system with PBS.
The minister directed the ministries of food and industries to immediately import onion and tomato from Afghanistan and Iran.
Similarly, he also directed the PBS to adopt a practice of regularly comparing the difference in wholesale and retail prices of essential food items in different districts across the country in collaboration with the province.
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