KARACHI, Jan 16: Commodity pundits rule out any decline in prices of essential items after a cut in diesel and petrol prices by one and four rupees per litre, respectively. However, they say that the decision will at least contain prices to the current level and will disarm commodity dealers of an excuse to jack up the prices of consumer items.

Consumers will not see any plausible decline in prices as market players say that bulk movement of essential goods takes place on diesel engine vehicles (trucks and trailers) from the upcountry, and the Re1 per litre cut on diesel prices will hardly have an impact on prices.

As far as cut of four rupees per litre on petrol is concerned, they argue that a large number of transporters, who usually use Suzuki vans, have converted their vehicles to CNG or LPG for saving purpose and very few vans are being run on petrol these days.

It has been noticed that whenever cost of production falls because of certain government measure, market players downplay the impact and adopt `go-slow’ tactics to revise rates downward.

Same situation exists in transport fares for public buses as transporters start charging higher fares in case 25 to 50 paisas is increased on diesel while they adopt dilly-dallying attitude in cutting the fares when diesel prices are lowered.

“The cut in petroleum prices is a good step. At least transporters will avoid making any demand for increase in fare from commodity dealers for upcountry or within the city,” said Anis Majeed, chairman, Karachi Wholesale Grocers Association (KWGA).

“If diesel prices are reduced by Rs four to five per litre, it can certainly result in a price decline,” he said, expressing the hope that the government would further cut diesel prices so that it benefits the consumers.

He said commodity dealers pay Rs25,000 to Rs30,000 to transporters for bringing 150 bags of rice, pulses, etc., from the upcountry or for transportation to upcountry from Karachi.

Costly transportation of goods adds Rs one to Rs two per kg in terms of prices.

“We cannot expect any price cut after a meager decline of Rs one per litre on diesel, but definitely the prices will not increase and may remain stable,” said Mr Anis.

A number of Suzuki van owners, who usually carry goods from Jodia Bazar, hub of the country’s wholesale trade, to various city destinations, have converted their vehicles to CNG or LPG. It means that there would hardly be any cut in prices, as there are very few vans running on petrol.

General Secretary, Karachi Retail Grocers Group, Mohammad Farid Qureishi, also did not see any price cut in future, saying a majority of transportation of goods takes place on vehicles using diesel.

The government should have reduced the diesel prices by Rs four to five per litre, if it really wants to control food inflation,” he said.In case some 15 bags of 80kgs each of atta are transported to the retail outlets from Jodia Bazar, the Suzuki vehicle owners, who have already converted to CNG, charge Rs20 per bag as transportation charges.

President, Falahi Anjuman Wholesale Vegetable Market (New Subzi Mandi) Haji Shahjehan, said that the prices of fruits and vegetables are not likely to drop as major arrival of commodities from the upcountry takes place on vehicles using diesel.

He said that Suzuki vans using CNG move both ways, from Subzi Mandi to various areas of the city. So there is hardly any impact on prices of fruits and vegetables as transportation charges would not come down after price cut in petroleum products.

He said the share of transportation of vegetables and fruits from upcountry and within the city ranges between Rs one to Rs two per kg on commodities.

Suzuki van owners usually charge Rs 500 to Rs 600 from traders for transporting greens and vegetables to various city areas. Now traders will seek reduction in fares in case the van runs on petrol.

Consumption of petrol is mere just one million tons per annum as compared to 7.5 million tons of diesel per year.