LAHORE: Expressing wonder over the recent order issued by the government to fix prices of a number of items, the local industry players have urged the government to ‘reform’ the market instead of hankering after price regulation as it would only create chaos.

“It is quite surprising that the government wants to control prices of non-essential items/goods that are always determined by the existing mechanism of a market economy and competition. I think it will be devastating to the country’s economy in general and the industry in particular,” deplores Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam) Chairman Abdul Rehman.

“Since the price control is always enforced on essential commodities used by the public at large and not on the industry engaged in the automobile sector, the government must withdraw its decision,” Rehman said while talking to Dawn on Tuesday.

The federal government had issued a notification on Aug 24 directing the controller general of prices and supplies to monitor and fix the rates of 50 items.

The order issued under Price Control and Prevention of Profiteering and Hoarding Order, 2021 has empowered the federal secretaries, the secretary or director of the industries department in provinces and the deputy commissioners to regulate and fix rates of commodities.

Since most of these items, including tea, milk, sugar, edible oils, meat, wheat, fruit juices, fruits and vegetables etc, are of daily use, some are industrial and agricultural inputs such as caustic soda, soda ash, pesticides, chemical fertilisers of all sorts. Moreover, prices of face masks, oxygen cylinder and hand sanitisers will also be controlled under the new arrangement.

But what is interesting to note is that prices of complex products like chemical fertilisers, cement, almost all sorts of vehicles including motorcycles, trucks, tractors, cars, light commercial vehicle (LCV), heavy commercial vehicle (HCV), sports utility vehicle (SUV), buses and trailers, which depend on many different inputs, will also be monitored and fixed. This has caught the local industry by surprise which believes the government should not intervene in this domain.

It merits mentioning that the cost escalation in the last five months alone is 27 per cent in steel sheet, 15pc in aluminum and 36pc in forgings.

Speaking to this reporter, Danial Malik of Master-Chenan Motors said it was not the government job to regulate the sector that runs on the open and competitive market mechanism.

“This is not flour or sugar, which are usually regulated by the government,” he said. He, however, appreciated the government for giving massive incentives to the automobile sector.

Published in Dawn, September 8th, 2021