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ISLAMABAD: Amid public outcry, the state-run Utility Stores Corporation (USC) has reduced the prices of about 40 essential items by up to 17 per cent with immediate effect to slightly lower than prices in the open retail market.
This will be followed by price cuts ahead of Ramazan. Before this reduction, there was a negligible difference between the prices of these items at USC outlets and in the open market, leading to public criticism of the caretaker government and the corporation’s management.
The price reduction, implemented over a weekend for immediate effect, pertained to 20 items in the vegetable ghee and cooking oil category, besides selected products in tea, detergents, etc. The lower rates would be available to all customers visiting USC outlets irrespective of BISP card or other qualifications.
This adjustment is in addition to a full-fledged Ramazan Relief Package to come into force on March 4, which will involve about 19 categories with an estimated cost of Rs7.49 billion and benefit only those falling under the BISP criteria. The biggest 17pc cut in the eatables category was made in the price of Tullo Cooking Oil, which became cheaper by Rs100 per litre to Rs490, while its ghee price was reduced by 8.3pc to Rs490 per kg, down Rs45.
Rates of 40 items reduced by up to 17pc
The prices of similar products of other brands have been reduced by between 1pc and 8pc, or by Rs10 to Rs54 per kg or litre.
In the tea category, four different items of Lipton Yellow Label were reduced by a flat 5pc. No price cut was available for other tea brands. In the detergent section, the biggest price cut of about 21.6pc was made in Capri Toilet Soap, while the prices of Unilever’s washing powers were down by 11pc to 14pc. Likewise, about six items of Ariel brand became cheaper by 5.5pc to 13pc.
Officials said the government would formally announce price cuts on 19 essential kitchen items next week with effect from March 4 under the Ramazan Relief Package at a cost of Rs7.493bn.
The facility, to be available only to BISP beneficiaries, will remain applicable until the last day of Ramazan.
The Ministry of Industries sought a subsidy for the targeted BISP beneficiaries registered under a proxy mean test (PMT) score of 60 — a poverty measurement scorecard — with a net amount of Rs7.49bn.
The Economic Coordination Committee (ECC) was told that Rs5bn had already been allocated during the current fiscal year for Ramzan Relief Package and the remaining Rs2.49bn should be reappropriated from the budget allocations for the Prime Minister Relief Package.
The ECC was told that the government had been providing relief to the general public during Ramzan through subsidised prices of 19 essential items at USC outlets since 1991. The government had allocated in the budget Rs35bn for the current financial year for subsidy on essential items under the Prime Minister’s Relief Package and Ramzan Relief Package, including Rs30bn and Rs5bn for the two initiatives, respectively.
The meeting was also informed that due to the IMF restrictions on untargeted subsidies, the government had approved the provision of subsidy to the targeted BISP beneficiaries registered under PMT-40 for this fiscal year and the ECC had approved the continuation of the PM Relief Package on the targeted subsidy model of Aug 7, 2023.
In compliance with the ECC’s decision, the USC converted the hybrid subsidy model to a targeted subsidy, which was being disbursed to the BISP beneficiaries registered under PMT-40.
The Utility Stores Corporation was selling subsidised items to 26.92 million households registered with BISP under PMT-40.
To serve the maximum number of targeted beneficiaries during the upcoming Ramazan, the ECC agreed that subsidy on 19 items would be disbursed to targeted BISP beneficiaries registered under PMT-60 instead of PMT-40 to serve an additional 12.73m households.
Published in Dawn, February 26th, 2024
