Price control - Pakistan Today

Price control

  • Mafias still at it?

Prime Minister Imran Khan has been under immense pressure to reduce the prices of basic food items that have risen recently to unmaintainable levels. Last month the prices of wheat and sugar skyrocketed, sounding alarms that there was a shortage in the market. The government insisted that supply was adequate, leading to the conclusion that hoarders were jacking up prices to make a profit. Mr Khan concurred with this rationale, calling the price manipulators ‘mafias’, vowing to take them on and dismantling them. The FIA was tasked with probing the crisis to identify the responsible parties. The report presented by the FIA to the PM and his cabinet was quickly rejected, making one wonder whose names were in the report, especially at a time when speculation was rife that at least two senior PTI leaders were involved. An updated report is now awaited that, according to the government’s spokesperson, will be made public.  If the PM has already made up his mind as to what sort of report he expects the FIA to furnish, then the investigation leading to a ‘crackdown’ on ‘mafias’ is quite pointless. Mr Khan has however, claimed victory in this battle, stating in a tweet yesterday that vegetable prices had ‘substantially decreased’. The reality is that most of this reduction is due to seasonal variations rather than a result of the PM’s ‘efforts’ to control prices. Meanwhile, sugar and wheat flour remain more expensive than they were during the previous government’s tenure.

These increases in food prices also have to do with inflation, currently at an all-time high of 14.6 percent and by some estimates even more than that. Consecutive hikes in energy prices and rupee depreciation have contributed to inflationary pressures, all of which are IMF conditionalities that have to be met to secure each tranche of the $6 billion EFF programme. If the recent negotiations with the IMF team are any indication, the PTI government has realized that any further hikes in energy prices would be disastrous and is trying to persuade the IMF to ease up on that condition for the time being. The PTI’s overreliance on the application of cosmetic remedies to serious issues has stopped working, and clearly there is concern about where prices are headed in the near future and how to control them.