What is the actual role of price regulators or the government in containing prices or keeping a check on price fluctuations? Is it to give a free hand to market players?
IT would be difficult to dispute that Pakistan is the only country where consumers have no right when it comes to the issue of a price hike. Producers, wholesalers and retailers enjoy complete liberty to change the market sentiments in their favour and price regulators continue to witness the situation as silent spectators.
For the last many years the burden on consumers has been intensifying because of an increase in various items’ prices like pulses, wheat flour, sugar, rice, meat, ghee and cooking oil, petroleum products and vegetables. The hike has virtually squeezed the general public, particularly the people belonging to the salaried class who have to manage their monthly budget as far as commodity procurement goes in a delicate way so that the money spent on education of their children (and other such expenses) does not go beyond their means.
Even a government employee has no respite from the annual increase of 15 per cent in their salaries as increased prices virtually off-set the impact of the rising salary income.
Consumers usually keep an eye on price fluctuations of pulses, wheat flour, sugar, meat, vegetables and poultry items instead of becoming more concerned about clothes which they can manage at cheaper rates, thanks to the now-available Chinese garments in the country. The other thing that makes the blood pressure of consumers shoot up is electricity bills. However, these days there is a bit relief as far as gas and telephone bills go.
For instance, a private sector employee who runs a house drawing a salary of Rs6,000 with two children is hard-pressed because utility bills, children’s education and medical expenses consume half of his salary. Any raise in the price of essentials further aggravates his problems.
Even a government employee is not satisfied despite getting an annual raise of 15 per cent in salary. The majority of government employees enjoy only medical facility which is too meagre when compared with the benefits given by the private sector or multinational companies to their employees. Rising prices send shock waves to government employees even if they get a salary of Rs10,000 to 15,000 per month, because they have no other source of income and their office doesn’t shower benefits like two Eid bonuses, annual bonus, casual leave encashment, other perks and incentives.
Daily wage earners also have multiple problems. Take the example of Karachi where a number of such labourers belonging to upcountry areas, earn their livelihood not only for themselves but also for their families. The only benefit for the labourers who do not have families here is the cheap hut hotels and restaurants which offer food at prices they can afford. However, a daily wage earner who takes care of a family in Karachi faces a daunting task in buying commodities, especially in the inflation season.
Arshad Khan, who works at a government office and has four children, has to manage his in-house economic affairs with a salary of Rs13,000 a month. He says he can control the expenses by curtailing the purchase of only selected clothes and consuming less electricity, gas and telephone. But the actual problem lies with high prices that have gone beyond an affordable level in the last few years. Any increase in prices of essential items creates a lot of problems in handling other domestic issues.
Naved Iqbal, who works at a private office and has two children, earns Rs10,000 per month, but hardly manages to save some money on a monthly basis because of burgeoning expenses.
“Sometimes I have to compromise on quality by buying low-priced and low-quality food items. According to the current market language, low price means low quality and high price implies high quality,” he says. He poses a question: “How long will I buy items of mediocre quality when chances of a price fall are bleak?”. He terms the last few years as “the years of living dangerously.”
General Secretary Karachi Retail Grocers Group (KRGG), Mohammad Farid Qureishi says compared to the last year, consumers are paying an average Rs500 higher this year on their monthly purchase of essential items. For the last many years, consumers have been witnessing an average increase of Rs500 as an additional burden on their monthly buying.
He says that the spending of Rs500 is restricted to the shopping of ghee, cooking oil, pulses, flour varieties, sugar and rice. The amount may become double if we one adds spices, squashed, biscuits, tomato ketchup, washing powder, shampoo, soap, toothpaste, powder milk, fresh milk, meat and vegetables to the list.
In the past, a person having a family of five used to spend Rs3,000 a month on buying just five items like ghee, cooking oil, pulses, rice, sugar and flour varieties. Now he has to arrange Rs3,500 per month for the same purpose.
“Similarly, these five main essential items now make a total of over Rs4,300 per month for a person taking care of a family of seven members with five children as compared to Rs3,800 a year back,” Farid Qureishi says.
Rising oil prices is another important contributor to rising inflation. Last year’s freezing of oil prices had somewhat contained inflation, but the domestic economy is likely to see the inflation trend in prices in the months to come after de-freezing of the price of key petroleum products, as producers and dealers charge the increase in transportation cost in response to a raise in diesel and petrol prices.
What is the actual role of price regulators or the government in containing prices or keeping a check on price fluctuations? Is it that their job is to give a free hand to market players or to act in an effective way as far as controlling the prices go? No government in the recent past has taken any concrete steps to keep prices in check.
Concerned government departments do not conduct any survey like keeping a check on the stock situation, closely monitoring the crop situation from producing areas, keeping an eye on the import situation and local godowns so that price fluctuations could be kept under control. This will also make them question producers, wholesalers and retailers responsible for the hike. If government departments do their job of collecting data, the market forces will think twice before playing games with the prices.
In this regard, a lot of consumers have voiced their concern, but to no avail. The government only acts, or tries to, when the prices go beyond consumers’ reach. The fact of the matter is that the authorities keep their eyes shut when a price hike takes its toll on the people.
Retailers, wholesalers and producers play the game of scratching each other’s back whenever prices go up in the market. The retailers blame the wholesalers while the latter blame the producers for the hike. There is a vested interest of investors in the market who play their game between the three main players of the market.
Where do the consumers stand today? Has their been any protest over the issue? At least none is heard from government quarters. One is witnessing a strange kind of apathy from the authorities concerned. People will keep on suffering and the government will keep on giving no or little importance to the matter.
It’s time the government came out with a rescue plan for consumers and tried to adopt the system and price control mechanisms in vogue in other countries where prices of different commodities are kept at affordable levels.
What is the actual role of price regulators or the government in containing prices or keeping a check on price fluctuations? Is it to give a free hand to market players?
