This year Ramazan will definitely be tougher than previous years for many low and middle-income group people, especially in terms of skyrocketing prices in the last year.
After over 12 hours of fasting, people try to enjoy lavish iftar by arranging many items. But many people with mediocre wages and salaries are likely to limit their purchases this year.
All responsibility lies on the government to ensure the availability of edible items at cheaper rates not only throughout the year but especially in the holy month. As the government is more occupied in political and economic chaos besides pinning hopes on approval of the International Monetary Fund loan (IMF), it is hard to expect any special measures that could bring any impressive price relief.
While consumers have witnessed a price spiral in the last year, the government is not in a position to offer any huge subsidies or duty/taxes relaxations to lower prices. Any efforts to curtail prices by lowering taxes and duties may irk the IMF ahead of loan approval.
As prices spiral upwards, Sehri and Iftar will be difficult for many low-income families
And a price fall of 10-20 per cent will not appease consumers unless they plummet by at least 30-40pc.
Instead of giving any benefit, the government has recently raised the general sales tax (GST) on many items to 18pc from 17pc and 10pc federal excise duty on fruit juices, making ghee/cooking oil and packed juices costlier.
The government has hardly moved in taking any serious notice of the frequent price hike in food items, thus giving a free hand to the manufacturers and market players to jack up prices at their whims.
Manufacturers blame various reasons like the rupee devaluation against the dollar and the soaring cost of production on account of rising raw material prices and transportation costs owing to rising diesel rates and high gas and power rates.
About Rs1,000-1,500 is required daily for a family of five, an exorbitant amount for a household earning Rs25,000-40,000
The rupee has gained ground from February 3 to February 23, as one dollar is now at Rs262, thus bringing down the cost of imported raw materials and finished items. However, no manufacturers pass on the benefit of the lower cost to inflation-hit consumers. They have continued to raise prices by trumpeting the same old tune of rupee depreciation against the dollar and high input cost in their price increase notices.
The government has not forced the manufacturers of various food items to give any solid evidence for justifying soaring prices on the claim of high production cost and rupee fall.
In a price comparison from the first week of Ramazan in April 2022 to the third week of February 2023, the most notable price shock came in 20 kg flour bags to Rs1,295-2,720 in various parts of the country from Rs800-1,500 per bag.
Flour prices spiralled continuously despite heavy imports of wheat and the presence of the country’s wheat crop, while issues of grain smuggling and non-release of wheat to the millers remain in media headlines.
How can a person with monthly earnings of Rs25,000-40,000 with a wife and two to three kids arrange Iftari and Sehri? Assuming daily consumption of a litre of milk, fruits, basin, yoghurt, ghee, and confectionary items, an estimated Rs1,000-1,500 is required daily. And that does not include gram, juices, cold drinks and vegetables.
General Secretary Karachi Retail Grocers Group Farid Qureishi said “I am making two types of ration packs for charity distribution for Ramazan in the holy month: one bag costs Rs4,000 and carries flour, sugar, rice, pulses, tea, salt, oil and ghee, gram and vermicelli. The other ration bag costs Rs6,000 and has more quantity of products.
“Last Ramazan, we managed these items at 40-50pc lower rates,” he said, adding that “we could not add rice as good quality basmati rice sells between Rs300-500 per kg now as compared to Rs150-300 per kg last year.”
A chicken dealer in Federal B Area said, “I am putting only four crates carrying 40 live birds as compared to eight crates when prices were low. Due to high prices, many of our regular customers just buy only one bird for the entire week’s consumption from two to three birds previously.”
A grocery retailer in a residential area offers products on credit on the condition that the bill is cleared in a month.
“I have witnessed at least 20-30 per cent jump in my register in the last year as more new people are coming up to get included in the list,” he said, adding that due to the cash flow situation, he cannot add more people. Many also default and seek extra time to clear dues. He said there are many people whose salaries fade away in the middle of the month.
The intensity of price increases in food items may push many low-income people towards long queues of welfare organisations’ arrangements of free Iftari and Sehri. However, a white-collar person may find it difficult to sacrifice his self-respect and opt for limiting Iftar.
Published in Dawn, February 27th, 2023
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