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A better policy

Friday, Jan 14, 2022

The current alarmingly high in the prices of essential items indicates at the state of helplessness of the government. Recent reports suggest that the average production cost of edible cooking oil is around Rs272.5 per kilogramme. The average sale price of cooking oil is close to Rs320 per kg, which means that a seller earns a profit of around Rs80 per kg. The prices of wheat and sugar are also high because manufacturers want to earn a decent amount of profit on these commodities. The government is also providing as many subsidies as it can to help stabilise prices. This sorry state is a direct result of mass-scale privatisation in the country, which allows manufacturers and traders to decide profit percentages on their own.

It used to be far more convenient for the government to maintain state-owned manufacturing units of edible oil, flour mills,sugar mills, etc to help keep prices at an affordable level. The Competition Commission of Pakistan has failed in breaking these cartels. The state is responsible for providing essential commodities at a reasonable rate. It is also true that no amount of relief packages, subsidies or appeals can stop the mafias to lower prices. The government must revise its privatisation policy and adopt an aggressive approach by ensuring that a certain number of manufacturing units are strictly under state control.

Khalid Ismail

Islamabad