June 20, 2008	Friday	Jamadi-us-Sani 15, 1429

KARACHI, June 19: Prices of various consumer items are expected to go up further next month as impact of various budgetary measures is reflected in values at the retail end.

Many companies have started analysing the impact of budgetary measures on prices. With the increase GST from 15 per cent to 16 per cent and other changes in duties and taxes, distributors of many companies have alerted retailers about the new price rates.

Karachi Retail Grocers Group General Secretary Farid Qureishi said the price of 25kg bag of imported milk has surged to Rs7,500-8,000 as compared to Rs7,000 owing to various reasons.

He added that the government had increased the import duty on vegetable fat filled milk powder and vegetable contained milk powder to 30 per cent from 20.

Mr. Farid said that the government should seriously consider reducing the GST back to 15 per cent coupled with cutting import duties on food items in order to lessen the burden on consumers.

He said distributors of Lux soap have put new price at Rs32 as compared to Rs30, while Surf Excel one kg bag price has surged to Rs180 from Rs160. The 400-gram pack of Surf Excel is now priced at Rs75 against Rs65.

Consumers will have to face a new wave of price hike in coming days as the prices of all packed items of big and small companies will go up further by one per cent owing to increase in GST, he said.

Ghee and cooking oil prices had been already raised in May. For example, Dalda’s five kg ghee and five litre cooking oil tins had been enhanced to Rs775 and Rs785 from Rs730 and Rs750. The rate for 2.5 litre/kg ghee and oil tins is Rs395 as compared to Rs373.

A leading ghee packer said that the company has yet to start working on new price after one per cent hike in GST, one per cent excise duty on imports and one per cent increase in income tax and rise in wages.

“I think the cumulative impact of various duties and taxes will push ghee and cooking oil rates further by three to five per cent,” he said adding that the companies may increase the rates in July. “The price of five litre cooking oil tin is likely to cross Rs800 in July,” he added.

Director projects Clover Pakistan Fazal Hussain Akbar said that his company will try to absorb the impact of GST hike. However, GST is not the only reason for price hike. Other factors like devaluation of rupee against the dollar have been hitting the manufacturers thus pushing up the raw material cost. Besides, increase in utility charges has pushed up cost of production.

This year, the holy month of Ramazan, starting early September, will be far tougher as compared to last year, when many products will become costlier much before the month. Traditionally, prices increased just ahead of Ramazan in anticipation of higher demand by retailers and wholesalers.