ISLAMABAD: Finance Minister Shaukat Tarin has directed the Competition Commission of Pakistan (CCP) to take immediate action to break cartelisation in ghee/edible oil market to prevent undue profiteering.
He issued these instructions at a recent meeting of the National Price Monitoring Committee (NPCC) to the CCP which is under criticism for extending undue benefits to some particular business groups.
Secretary Finance stated that monthly CPI for June 2021 recorded at 9.7 percent against 8.6 percent in the same month last year. Similarly, food and non- food inflation recorded at 11.0 and 8.9 percent in June 2021 while 12.9 and 4.7 percent was recorded in the same month last year:
Finance Minister directed PBS to give one pager analysis of factors responsible for rising inflationary indicators on weekly and monthly basis in order to gauge the causes of price hike properly and to take suitable steps accordingly.
Secretary Finance noted that the weekly SPI increased at 0.07 percent for the week ended on July 8, 2021. Price of 9 items declined, 23 items increased and 19 items remained stable. PBS apprised the committee of the profit margin between wholesalers and retailers across all the districts of Pakistan.
Finance Minister showed concern over huge profit margin in essential items especially pulses and directed PBS to share the profit margin data of essential items with the provincial governments along with market details from where prices were collected so that they can take targeted remedial measures.
Secretary Finance also elaborated on the price movement of food and fuel items in international market. It was observed that prices of palm oil declined by 12 percent, Soya bean oil by 8.6 percent and rice by 5 percent in June 2021 over the previous month. It was further added that crude oil prices increased by 7.5 percent and wheat by 1.5 percent.
Finance Minister directed Ministry of Industries and Production to hold a meeting in consultation with CCP, FBR and edible oil/ghee producers to work out a mechanism to pass on the impact of lower international prices to domestic consumers and strict action may be initiated by imposing regulatory duties to minimise the undue profit margin of cartels, if required.
Chief Secretary Punjab presented the value chain of essential items and apprised that provincial government is vigilant in monitoring the price movement of essential items. DG CCP also gave a detailed presentation regarding the role of middleman in case of tomatoes and onion all over the country. It was noted that profit margin is huge except in KPK as the KP provincial government has established farmers’ bazaars which help the local farmers sell their product directly to the consumers.
Finance Minister appreciated the initiatives and desired such initiatives to be replicated in other provinces as well to minimise the exploitation by middle man. Punjab Government requested Ministry of National Food Security and Research (NFS&R) to take necessary measures in coordination with other relevant departments to facilitate the import of tomatoes and onions from neighbouring countries in order to ensure smooth supply and affordable prices of these items during the stress period of July to November.
Secretary Ministry of National Food Security and Research clarified that there is no ban on import of the perishable items. Finance Minister directed Ministry of NFS&R to bring summary to ECC for determining the minimum support price of wheat for the year 2022.
Secretary Industries & Production informed the forum that sugar stock position is satisfactory in the country. However, to build strategic reserves an additional 1 lakh ton sugar is being imported for smooth supply. Finance Minister directed the Ministry to initiate process for additional one lakh tons of sugar for price stability of sugar in the coming months.
After-detailed deliberations, following decisions were taken: (i) PBS to prepare the variance analysis explaining reasons of all contributing factors (devaluation, tariff, taxes & duties, increase in international prices, base effect) resulting in price escalation in monthly and weekly CPI/SPI; (ii) PBS to share the detail of districts markets with the provincial governments where the profit margin between retail and whole sale is more than 20 percent, for initiating necessary administrative steps by the provinces.
Copyright Business Recorder, 2021