KARACHI: Government decision to flare up the prices of power and LPG on account of rupee devaluation took a hit on weekly inflation that jumped 14.33 percent year-on-year and 1.31 percent week-on-week during the seven-day period ended September 16, 2021.
Inflation report released by the Pakistan Bureau of Statistics (PBS) attributed the YoY change to increase in prices of electricity for Q1 (57.14 percent), LPG (51.06 percent), vegetable ghee 1kg (40.15 percent), vegetable ghee 2.5kg (38.14 percent), cooking oil 5 litre (38.03 percent), mustard oil (37.59 percent), chicken (36.52 percent), chilli powder (35.71 percent), gents sandal (33.37 percent), eggs (27.60 percent), and gents sponge chappal (25.31 percent).
PBS data attributes different weightages to the commodities in the SPI basket. The commodities with the highest weightages for the lowest quintile include milk (17.5449 points), electricity (8.3627 points), and wheat flour (6.1372 points).
Up till last week power consumers were paying Rs5.95/unit, which the government decided to increase to Rs6.38 on account of devaluation of rupee against dollar. During the week ended September 17, 2020, the tariff was Rs4.06 per unit.
After the government hinted at removing the 32 percent subsidy on wheat provided to millers, an increase of Rs12.11 was recorded on a 20kg bag of wheat flour. A flour bag is now priced at Rs1,234.18 compared to Rs1,222.07 last week and Rs1,013.95 during the same period last year. Wheat flour price had already climbed by 5 percent or Rs57.85 last week. The price would likely go up further, increasing inflationary pressure, especially on the quintile with the lowest spending power.
SPI for the groups spending up to Rs17,731; Rs17,732-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175 showed an increase of 0.77, 1.28, 1.01, 0.92, and 1.36, respectively. The highest impact of 17.10 percent YoY increase was suffered by the first quintile. For the week under review, SPI was recorded at 157.30 points against 155.26 points registered previously.
SPI is computed on weekly basis to assess the price movements of essential commodities at shorter interval of time so as to review the price situation in the country. It comprises of 51 essential items and the prices are collected from 50 markets in 17 cities of the country.
During the week, prices of 22 items increased, 10 decreased, while prices of 19 items remained unchanged.
Inflation report attributed the Wow rise to electricity charges for Q1 (7.32 percent), diesel (4.37 percent), petrol (4.19 percent), chicken (3.40 percent), eggs (3.10 percent), LPG (2.58 percent), washing soap (2.43 percent), tea (1.73 percent), cooking oil 5 litre (1.43 percent), georgette (1.35 percent) and sugar (1.23 percent). The joint impact of these commodities was 1.68 percent.
Decrease was noted in the prices of tomatoes (18.59 percent), onions (7.22 percent), bananas (4.92 percent), potatoes (3.90 percent), pulse moong (2.24 percent), garlic (1.53 percent), pulse gram (1.20 percent), rice irri (1.05 percent), pulse mash (0.85 percent), and pulse masoor (0.3 percent).
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