LAHORE, Feb 27: Mills are ready to withdraw increase in flour price provided the government compensates them and devises some kind of a mechanism to absorb periodic increase in input cost, says Sheikh Shabir Ahmad, central president of the Pakistan Flour Mills Association (PFMA).

Commenting on the recent flour price increase, he said that so far only the Lahore chapter of the PFMA had decided to increase prices.

He said the government had determined the price of flour some eight years ago on the basis of input cost at that time. “Since then, the millers have not been allowed to increase flour price according to hike in input cost.”

He clarified that the flour price hike during the period was only due to increase in wheat cost.

Regarding the input cost, Ahmad said the patrol price had almost doubled during the last eight years. “The labour cost has also increased. Now the government has increased electricity charges - the second biggest input of mills after wheat itself - and still wants the millers to keep a lid on the flour price.”

The flour mills in the province decided to increase price by Rs4 per 20kg bag following a 10 per cent hike in power charges last week. In its Monday’s meeting, the Economic Coordination Committee (ECC) took note of the hike and directed the provincial governments to bring prices back to pre-hike level.

Following the federal stricture, the provincial government swung into action. Chief Minister Pervaiz Elahi held a meeting on Tuesday and said that no increase would be tolerated.

He directed the Food department to immediately summon Flour Mills Association representatives to chalk out a strategy to keep the price in check.

Talking to Dawn, food minister Hussain Jehania Gardezi said that his department would shortly be convening the meeting.

As a measure of compensation, he said, the department could increase wheat releases to millers. When reminded that the department was already following a policy of liberal releases, he said that releases could still be increased to benefit interested millers but undue price increase would not be tolerated.