09/07/2012 (DAWN.com) - While manufacturers and traders have increased the prices of all basic commodities over the recent months in the absence of an effective price checking mechanism and an efficient consumer rights body, huge discounts to be announced during Ramazan are not likely to provide the much needed relief to consumers.

The government decision to drop diesel prices by Rs8.5 per litre and compressed natural gas by Rs9 per kg must have brought down transportation cost, but consumers have yet to see its impact on prices.

In the absence of strict implementation of price lists issued by the local authorities on a fortnightly basis, manufacturers and traders continued to increase the prices of groceries in March and April, providing different reasons for it. A manufacturer said that the increasing cost of imported raw material due to a 10 per cent devaluation of the rupee against the dollar over the past one year had neutralized the cut in transportation charges.

Perhaps black tea is the only item whose price has dropped recently due to an 11 per cent cut in its sales tax. In the 2012-13 budget, the sales tax was reduced from 16 to five per cent, causing black tea prices to drop by Rs50-60 a kilo. But it is worth noting that tea packers had raised the prices in March 2012.

While flour is another basic commodity whose wholesale price has been slashed by millers in June from Rs30.50 to Rs29 a kilo, retailers still maintained the old price of Rs33-34 per kilo of 2.5-quality flour.

Price survey
A pre-Ramazan price survey shows that there is virtually no respite for consumers in pulses owing to retailers’ huge profit making as compared to low wholesale prices.

For example, gram pulse is being sold at Rs120-130 a kilo though its wholesale rate is Rs92-95. In June 2011, it was sold at Rs73 a kilo.

Mash wholesale rate hovers between Rs82 and Rs84 a kilo, but retailers are charging between Rs120 and Rs140. In June 2011, it was sold between Rs135 and Rs143 a kilo.

Masoor is available at Rs64 a kilo at the wholesale market but retailers are compelling consumers to pay between Rs80 and Rs120 a kilo. In June 2011, it was sold between Rs84 and Rs90 a kilo.

Good quality Arhar’s wholesale rate is Rs132 a kilo but it is being sold up to Rs160 a kilo. Last year it was sold between Rs127 and Rs144 a kilo.

Retailers are demanding between Rs122 and Rs140 for a kilo of Moong though it is available at the wholesale market at Rs108 a kilo. Its last year’s retail price was between Rs135 and Rs148 a kilo. Sugar’s wholesale price is quoted as Rs51.50 a kilo but retailers are demanding up to Rs55. Last year it was available in retail at Rs70 a kilo.

Consumers are paying Rs75 for one litre pack of milk in June 2012 which after an increase of Rs10 in May 2012 is now tagged at Rs90.

Fresh milk now sells at Rs75 a litre while it was quoted as Rs68 a litre last year. Retailers raised the price by Rs5 in April 2012.

In Nido brand, consumers faced a jerk in April 2012 when the price of its one-kilo pack was raised from Rs560 to Rs590. In June 2011, it was sold at Rs520.

In March 2012, the price of Everyday tea whitener was raised from Rs500 to Rs540. In June 2011, it was sold at Rs450.

Branded ghee and cooking oil makers completely ignored the falling prices of palm oil in world markets. Instead they raised the prices.

Dalda’s five litre cooking oil and five kg ghee tin is sold at Rs1,110 as compared to Rs995 in February 2012. In June 2011, it was sold at Rs975.

Discount schemes are likely to be announced during Ramazan after the rates were increased in recent months.

Companies selling 16-litre cooking oil tin and 16-kg ghee change the prices almost daily in view of fluctuation in rates of palm oil in world markets. Retailers say that many companies have increased the prices by Rs4 a litre ahead of Ramazan.

The prices of mutton hovers between Rs550 and Rs600 a kilo as compared to Rs480 and Rs520 a kilo in June last year. Beef with and without bones is now available at Rs300-Rs320 and Rs370-Rs400 a kilo as compared to Rs270-Rs280 and Rs330-Rs340 a kilo, respectively.

Hardly any shopkeeper sells the grocery items at control rate though some retailers do display the official list. With no effective price checking mechanism, the retailers enjoy a free hand to charge prices on their own.

The role of local authorities remained usually confined to the issuance of ‘unrealistic fortnightly price list’ rather than making any real effort to implement the official rate at the retailers’ end.

In view of past months of Ramazan, it is hard to expect a better performance from price regulators this year in controlling demand-driven food inflation.