KARACHI: The cost of living increased in 2013 owing to high prices of edibles, inflated power bills and soaring transportation expenses.

Manufacturers and traders passed on the impact of higher cost of production and increase in import costs due to rupee devaluation to the consumers. Price hike also partially resulted from increase in general sales tax (GST) that went up from 16 per cent to 17pc since July 2013.

In the absence of any effective check on profiteering, manufacturers fixed prices unilaterally while traders cashed on the demand and supply gap.

There was no major increase in gas tariff for domestic consumers but power rates rose by approximately 50pc in the last one year.

Major increase in prices was seen in all the varieties of wheat flour, pulses, rice varieties, detergents, milk varieties, spices etc.

A price comparison survey prepared by the Karachi Retail Grocers Group (KRGG) from January 2013 and December 2013 revealed jump in the 10kg wheat flour bag produced by mills to Rs460-470 as compared to Rs420-430.

Fine atta, flour no.2.5 and chakki flour now cost Rs46, Rs44 and Rs48 per kg as compared to Rs42, Rs40 and Rs44 per kg respectively.

Maida (super fine flour) now sells at Rs50-52 per kg as compared to Rs44-46 per kg.

White gram (Kabuli channa) and black gram (kala channa) rates fell to Rs112 and Rs66 per kg from Rs138 and Rs105 per kg, respectively. Consumers paid Rs60-65 per kg for sugar in November 2013.

However, there was some stability in sugar price after start of cane crushing as it is now priced at Rs50 per kg as compared to Rs55 per kg in January 2013.

Tea makers first raised the prices in March and further increased the rate in from August but reduced the prices earlier this month.

Comparing their prices from January 2013, the rates are still considered high. For example, Tapal Mixture 950 grams was available at Rs590 which rose to Rs675 from March and further went up to Rs715 in August. Its current rate is Rs655. Tapal Danedar 950 grams now sell at Rs690. Its rate in March was raised to 675 and in August it was priced at Rs715. In January it was selling at Rs590.

Everyday tea whitener (one kg pack), which was priced at Rs560, now sells at Rs600, while its 400 gram is being sold at Rs270 as against Rs250 in January 2013. Surf Excel and Ariel (washing powder) one kg pack are now priced at Rs250 as compared to Rs240.

Local gold prices dropped to Rs42,428 per 10 grams on December 31, 2013 from Rs53,271 on January 1, 2013.

Rupee devaluation against the dollar caused a major blow for finished goods and raw material prices. One dollar was equal to Rs108-109 a month back and now, after government’s intervention, is traded at Rs105.60 as compared to Rs97.2 in January 2013.

CEO Top Line Securities Mohammad Sohail said in 2013, average CPI significantly reduced from 9.7pc in 2012 to 7.55pc in 11M2013. This decline was mainly attributed to low CPI in 1H2013 due to stable electricity and gas tariff.

However, CPI increased in 2H2013 after government’s fiscal reforms in shape of higher tax rates and electricity rates. Though food inflation remained volatile throughout the year, the reading slightly came down to 8.1pc in 11M2013 from 8.48pc in 2012.

“CPI increases and cost of living go hand in hand. However, actual increase in cost of living may be more than the inflation number as CPI only covers selected items, some of those at regulated prices,” he added.

In 2014, Sohail expects increased electricity tariff, imported inflation and expected hike in gas tariff will push CPI to 9.5-10pc. During 1H2014, monthly CPI may stay in double digit range but is expected to come down to single digit from July 2014.KRGG General Secretary Farid Qureishi said blamed the price hike from July onwards on changes in taxes and duties in the budget along with in power, transportation charges and rupee devaluation.

He said that he was unable predict price trend in 2014 as much will depend on devaluation, utility bills, transportation charges and budgetary measures 2014-2015.