The cost of living has seen a significant increase in the first two days of the current interim government, with sharp price spikes observed in sugar and steel bars. This rise in prices can be attributed to various factors, including a Rs20 per litre increase in diesel rates, the depreciation of the rupee against the dollar, and hoarding practices.
According to sugar dealers, the wholesale rate of sugar has risen by Rs8 per kg to Rs153 in just two days, pushing the retail price to Rs160 from the previous range of Rs150-155 per kg. Online shops are now selling sugar at Rs170 per kg, up from Rs160-165 per kg.
Rauf Ibrahim, the head of the Karachi Wholesalers Grocers Association (KWGA), expressed concern over the impact of this price hike on consumers. He criticized the caretaker government for not taking action against speculators and investors who have taken control of the sugar trade. Ibrahim believed that if the government cracked down on hoarders and millers, the price of sugar would immediately drop below Rs100 per kg.
The sugar crisis has also affected the downstream industry, which uses sugar as a raw material. Javed Sarwana from the Pakistan Biscuit and Confectionery Manufacturers’ Association called for government intervention to stop the practice of “looting consumers” by market manipulators. Sarwana warned that unless action is taken against cartelization, factories may be forced to shut down.
In addition to the increase in sugar prices, steel bars have also witnessed a significant price jump. The price of steel bars has reached Rs270,000-280,000 per tonne, reflecting an increase of Rs10,000 per tonne. This price hike can be attributed to the rising cost of energy and the highly volatile rupee-dollar parity. Industry insiders have stated that they can no longer absorb such massive price fluctuations in manufacturing costs.
The ongoing depreciation of the rupee against the dollar has further compounded the problem by increasing the landed cost of imported raw materials and finished goods. This has put additional pressure on the prices of essential commodities.
In the midst of these price hikes and market challenges, Balochistan Wheels Limited (BWL) has decided to temporarily halt production from August 18 to 31. The company cited a reduction in sales orders due to decreased production volumes of local auto assemblers as the reason for the shutdown. BWL plans to resume production from September 1.
It is crucial for the government to address these issues promptly and take action against hoarders, manipulators, and cartelization in order to alleviate the burden on consumers and stabilize the cost of living.