KARACHI, July 12: The Utility Stores Corporation (USC) increased on Saturday the rate of 10 kg flour bag (No 2.5) to Rs200 from Rs150.

An USC official told Dawn that the new price would be effective from Monday. However, the 10-kg flour bag at the utility stores will be still cheaper as the same bag is available at Rs300-310 per 10 kg in retail markets.

The gap between the prices of essential items at the utility stores and the retail market have been shrinking quickly thus giving a severe jolt to the already hard-pressed low income bracket people.

Last week, the USC had made Rs6 per kg increase in sugar price to Rs31 from Rs25. Besides, the price of super Kernal basmati had also been surged to Rs93 from Rs80 per kg two weeks back. In retail market the same brand was priced at Rs125 per kg. In May, the super Kernel basmati price was increased to Rs72 from Rs60 per kg.

About 20 days back, the subsidised ghee and cooking oil pouch of one kg was raised to Rs120 from Rs100. In May this year, the USC had raised the price of ghee and cooking oil from Rs67 per kg to Rs80. The corporation had also enhanced the rate of gram pulse to Rs50 from Rs29 per kg four days back. In the retail market, the same quality is available at Rs64 per kg.

The wholesale price of sugar in the markets went up to Rs31 per kg a day back while the retailers had already enhanced the rate to Rs32 per kg from Rs30 per kg.

Retailers are now flexing their muscles to further increase in the rate after fresh increase in wholesale price. Due to a very thin market price difference, sugar had literally lost the charm for the consumers at the utility stores.

An USC official linked the increase in prices to phasing out of food subsidies by the government coupled with rise in prices of commodities.

He said in case of flour, the government was still giving a heavy subsidy in order to keep the rates under control.

The official said that the USC, which had not been getting wheat from the TCP and Passco for the last one month, had finally started getting it from last week. In the meantime, the USC had been selling flour bags in limited quantities at the stores.

He said that the rush for flour bag was unlikely to subside as the gap between market rates and utility stores is still Rs100 per 10 kg bag, which is a big amount for the low income group people.

It has been observed that the long queues of buyers are hardly seen these days at utility stores since the prices of essential items at these stores had been climbing up for the last two months. However, the official said that the thin presence of buyers in the last one month is mainly because of the reduced supply of flour bags.