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KARACHI: The first year of PTI government turned out to be a difficult one for consumers as the cost of living witnessed sustained increase over the period.
High food prices, increasing petroleum, CNG and LPG rates, rupee depreciation against the dollar, rise in utility bills and changes in duties and taxes were the main drivers fuelling this higher cost of living.
One of the major reasons behind the push in costs was the exchange rate parity, as dollar has surged to Rs158, from Rs123 in August 2018.
Meanwhile, the consumer price index July grew by 10.3 per cent year-on-year versus an increase of 8.9pc in June and 5.8pc in July last year.
Petrol and diesel, which were Rs95.24 and Rs112.94 per litre, are now available Rs117.83 and Rs132.47 per litre. When the government came into power, CNG was priced at Rs81.70 as against the current rate of Rs123 per kg owing to increase in gas prices.
For most people, inflation is the most visible marker of govt’s first year in power
The price of chappati and nan went up by Rs2 to Rs8and Rs12, respectively while that of sheermal and taftan to Rs35-40, from Rs 30-32. Because of rising flour prices and other items, bread makers had raised prices twice – first ahead of Ramazan by 8.1pc and then by 9pc before Eidul Azha.
Sugar price jumped to Rs75-78 per kg depending on the area, from Rs65 per kg in last August. However, the rate of the commodity this January was around Rs55-60 per kg. Similarly, cost of steel bars swelled up to Rs120,000 per tonne from Rs103,000 in August 2018 while cement bag is worth Rs720-740 per 50 bag, as against Rs640 in last year.
Good quality ghee per kilo and one-litre cooking oil prices went up to Rs200-220 and 230, from Rs180-200 and Rs180-200, respectively.
The prevailing rates of gram pulse, moong, masur and Arhar are Rs140-160, Rs160-170, Rs130 and Rs180 as compared to Rs95, Rs90, Rs80-90 and Rs130 per kg respectively. Various varieties of rice became costlier by Rs10 per kg.
In the absence of any official rate hike, milk sellers on their own raised loose milk price to Rs100-120 per litre, from Rs 94, followed by yogurt to Rs150-160 per kg as against Rs140 per kg.
According to Mohammad Sohail of Topline Securities, gas prices for feed stock climbed to Rs300 per mmBtu (excluding Gas Infrastructure Development Cess of Rs300 per mmBtu), from Rs123 per mmBtu. In fuel (normal gas), gas rate were raised to Rs1,021, from Rs600 per mmBtu (excluding GIDC of Rs150-200 per mmBtu).
He said a urea bag used to sell at Rs1,650 as compared to the current rate of Rs1,850 while DAP costs Rs3,600 versus Rs3,382. According to him, power rates have gone slightly up to Rs14 per kWh, from Rs12 per kWh.
“Rising energy prices is due to the reduction in government subsidy and its attempts to control the sector’s circular debt, in addition to meeting the International Monetary Fund conditions,” Sohail said, adding that as per the IMF document released last month, power tariff in Pakistan would further go up in September.
Veil meat with and without bones are now sold at Rs540-580 and Rs680-700 per kg as compared to Rs480-520 and Rs600-640 per kg while mutton price now hovers around Rs1,100-1,200 per kg depending on the area as compared to Rs950-1,000 per kg.
Around one kg pouch of Nido and EveryDay tea whitener are now sold at Rs980 and Rs930 respectively, up from Rs780 and Rs765 a year back whereas 1kg bag of tea is worth Rs910, versus Rs830 per kg.
All of this has hit the lowest strata the hardest as they now struggle to meet the burgeoning expenses with many limiting their purchases to necessities only, instead of buying in bulk.
Giving an example, a residential area shop owner in Karachi’s FB Area - Ali Tariq - said people now increasingly buy 125 or 250 grams of pulses to meet the ready demand instead of half kg or one kg which they used to buy when prices were lower. The same trend also persists in sugar, rice, flour, etc.
He said some consumers instead of asking per kg rate take pulses for just Rs20-40 now.
Residential area shopkeepers also maintain a credit register of consumers and according Tariq, the number of shoppers seeking credit has grown in the past one year and the situation is so bad that many ask to write menial purchases of Rs120-200 in their account.
Giving an example, Ali said if he had list of 10 customers last year but now the numbers are 13-14. Customers availing credit purchases pay the amount either at the end of month or after one to two weeks while in many cases “we have to remind the customers to clear their dues to meet our shops’ running expenses.”
Karachi Retail Grocers Group (KRGG) General Secretary Farid Qureshi the practice of availing goods on credit is mainly common in shops located in residential areas where shopkeepers know the whereabouts of buyers.
According to shopkeepers, consumers still want to buy items but higher prices have rendered their affordability limited. Besides, the erosion in rupee value has also pushed up the cost of imported raw materials used in manufacturing local products.
Published in Dawn, August 18th, 2019
Comments (63) Closed
Here is the difference. India facing over supply n deflation. Pakistan inflation. Pls control population.
It will be nice if Dawn can come up with an article that talks about the typical daily diet of a lower income Pakistani versus a higher income and how many mouths to feed in the same households.
High food prices, increasing petroleum, CNG and LPG rates, - rupee depreciation against all other major currencies.
Rightly said inflation eats up all income... but wait whose income?? Only poor’s income, politicians don’t bear such inflationary effects because of their income n perks especially subsidized everything they use.
We knew inflation would be a problem. Ishaq Dar tried to shore up the rupee until the election was over. It only caused the rupee to fall further when the rupee was floated on the money market.
The prices of essentials in Pakistan is about twice to thrice of the same in India even though most of them are produced internally.
Politicians have the luxury of sitting in A/C rooms, traveling in planes and chauffeured cars, eating nothing but the best while the regular folk have to work for a living and pay taxes to feed them. This is new age feudalism. Funny how somethings never change.
Feel sad for the people that are most affected by these rises. Where are past leaders now? Why drain the treasury on useless things?
Finally some news on Pakistan.
And trade with india stopped... What is the gain?
@Nusrat, past leaders are in jail where you sent them
@Bugle , Pakistan should develop it's own industry and agriculture instead of depending on your enemy.
Let Kashmir issue resolved inflation will go away.
All Kashmiris must realised what financial stability of a country is important for its citizens.
Now the correct topic raised by dawn
Banning indian imports .... that doesn't look so bright now , does it ?
@Manu USA, really?
if you guys are sane, do some introspection and normalise relations with us. Stopping trade doesn’t affect us but you. Only India can help you get out of this economic mess, other countries just exploit you. Choose wisely. Good luck
inflation is the first sign of the failure of the new government
Trade with India is the only answer to Pakistan's woes.
Kashmir has become more expensive too.
People should have some patience. Food, oil, gas, education, healthcare, job, utility bills can all wait. They can meanwhile adjust with eating grass. Let IK focus on getting Kashmir
What's important, Kashmir or basic necessities?
The price increase is the very common thing. But when ever the price increases the pay across all sector increases. So the domestic market increases, the PPP & GDP of the country increases.
But so sad that people are suffering for food. And mercy less IMF is putting more pressure on common people
I understand the reasons without getting emotional, those were tough decisions, but what I think the government needs to do is, while its hurting the people of Pakistan due to the increase in prices on just about everything, the government ought to decrease the salaries of every MNA, every Senator, every Minister and everything in between by 90%, take away all the perks and privileges, car allowances, patrol allowances, no more free electric, gas, nothing, lets see how they react. Just to have a fair playing field, kind of.
Some more inflammation possible in daily food items due to trade block with India. However, I assume Pakistani people will get used to higher inflation after a while.à
Please open the trade with India immediately. It seems prices of pulses in Pak are almost 3 times than In India..Dont push the poor to further poverty and hungry please. Let them have their stomach atleast half full...Let them get benwfit ftom Indian exports please...
PTI now needs to draw country's focus on Kashmir so they don't have to answer people why inflation is going up
Not good for internal safety and stability.
This obviously is't good for the masses. However, market forces i.e.supply, demand and ruppee are working on the true value of dollar. Ruppee value was artificially boosted against dollar in the past. Economic forces will fall in line but higher prices will not go anywhere. It doesn't help that those who should pay taxes don't. Consequently, the buck is passed on to the consumer as govt has to generate income.
This is the reality.
Let Imran khan solve Kashmir issue first then he may try find some time for his own countrymen. Let him compete with India first but then why don't he thinks that prices should also have an agenda to compete with India. In India all' vegetables are available in Rd 10 to Rs 50 a kgs. Milk Rs 50 a litre.
The narrative that corruption was the cause of all economic problems is no longer being sung ?
Why didn't the businesses and retailers deposit the 17% GST with the government (as they were mandated to), instead of charging it from the consumers and eating it up. What deceit and treachery with the consumers and govt. Yet they complain of inflation when the government is trying to settle external loans taken (and eaten) by MNS and AAZ govts.
Politicians use Kashmir to only distract voters from reality and to cover their inadequacies
Thos is what happens when you fall in unnecessary business
Would be beneficial if the reasons for the rupee devaluation and price hike would have been shared. The poor has been sacrificed due to the policies of previous government. Also what differently this Government would have done to avoid this.
"Business, consumers struggle to cope as inflation eats into incomes" Add media houses as well, where advertisement business dropped almost to zero and financial help to needy journalists for purchase houses , costly automobiles and luxury abroad travelling
The business community simply need an excuse to make more money.
A totally ruined Pakistani economy and hunger and deprivation in the streets and our so called leaders trying to divert attention by exploiting the Kashmir issue. It would be wiser to stop that nonsense and concentrate on fixing our own country first.
Cost of living increases are a worldwide fact for market driven economies. Whether it is PTI in power or anyone else, this fact will not change as long as you have a market driven economy where prices are controlled by supply and demand principle of the economy. The only options are either increase supply through production and competition or reduce demand through cutting population growth or provide opportunities for more business growth and jobs for people
@Facts Matter, Naya Pakistan my friend
@Manu USA, Indian rupees was declared the worst South Asian currency the auto sector are suffering with huge sticks there is a economic slowdown
Apart from inflation and higher prices of commodities for the masses, they did pretty good during the first year in office
Out of three basic necessities, food has the topmost priority. Hungry people cannot envision Naya Pakistan and do not care about Kashmir issues. Spend govt resources with due care and work on controlling the inflation. I see the army take over sooner than later, if situation continues.
@ABDUL MAJEED SHEIKH, Very good
and we want kashmir....
Stay calm evry thing will be alright .economy in good hands of best team in world. Just wait another 4 years .
@Manu USA, India also has inflation, but it's very moderate now in the 2-4% range. Deflation is not a good thing, it destroys economies. So don't wish for one.
Ask IK's govt and it will claim it has tried to save the poor from the hard grind. Bullocks
@Dr. Salaria, Aamir Ahmad, And how exactly the word good means.
At this rate people will starve next year. What is the political class doing? Riots will start as inflation spirals.
Business will survive some how but would the poor be fed!!!!!
This is highly irresponsible reporting, no mention of location of the markets:, Kharian, Lahore, Layyah, Rawalakot or Rawalpindi? The real challenge is to find out how prices have oscillated in urban versus rural areas.
Both Government and military leadership in Pakistan have been successful in camouflaging these real issues using Kashmir.
It is time people of Pakistan know the truth of the nature of its state
How can well wishers of Naya Pakistan at home and abroad can help to ease the present situation.? A food for thought.
@Manu USA, India 1.3 billion population and 350 million in poverty, Pakistan 200 million population, work it out.
I wish Pakistan can produce enough food for its people that no one goes hungry.
Observing the current market rates, more so of day to day food items, as revealed in the above story it seems the current PTI Govt. is in trouble. It will be the handy reason for the opposition irrespective of the fact that it is their legacy that has been acquired by the current dispensation, to raise hue and cry and make them responsible for the tribulation. The Govt. machinery will have to pull their socks up so as to confront the toughened situation if and when it arises.
@ABDUL MAJEED SHEIKH, @Manu USA, Indian... auto sector are suffering with huge sticks there is a economic slowdown.
That's what Manu said, oversupply of items causing deflation. In fact 3% inflation in India.
I had read that after the trade ban with India cement prices have fallen in Pakistan
@Nusrat, Where are current leaders who were supposed to bring in USB100 Bn in one single day.. where are the leaders who used to say "when petroleum prices are increased, it shows corruption in the government ranks...where are the economy wizards who were habitual to tell the nation that actual price of petrol is Rs. 46 and the rest are going in someone's pocket?
@desi dimag, well said!