Price gouging adds to ‘double whammy’ of hike

ON top of spiralling inflation and an almost daily increase in prices of daily-use items, the ‘self-created’ hike by manufacturers, wholesalers, retailers and service providers has pushed people deeper into financial stress, making their lives more miserable.

On the other hand, the government appears to be taking cosmetic measures only to control the prices in the absence of a price and profit assessment and regulation mechanism, leading to record-high rates of commodities unbearable for the common man.

“Frankly, there is no mechanism or system. However, except the prices of fruits, vegetables, poultry etc, which are dependent on demand and supply, the increase in prices of all commodities must be checked and regulated,” Lahore Market Committee Secretary Shahzad Cheema told Dawn.

He said price control magistrates in districts are only restricted to getting the officially notified prices implemented by retailers who, on the pretext of the increase in POL prices and other factors -- import of pulses and other commodities, inflation, dollar exchange rate, price increase by wholesalers, manufacturers etc, don’t heed to the officials’ instructions and charge as per their whims.

“It is true that people are passing through the worst wave of price hike. But it is also true that the self-created price hike (or price gouging) on the part of manufacturers, wholesalers and retailers has added to the miseries of the common man,” he deplored.

Price gouging is a situation where businesses take advantage of a crisis to charge excessive prices for basic necessities – selling goods significantly above their usual price.

According to the Pakistan Bureau of Statistics, the inflation rate has climbed to an unprecedented 21.32 per cent, the highest in around 14 years. Until April, the rate was 14.6pc.

“I have never seen a hike in prices almost on a daily basis. A couple of days ago, I bought cooking oil for Rs540 per litre. But today (Friday), I bought it for Rs580 from a shop near my house,” lamented Farrukh, a consumer at a grocery shop, while talking to Dawn. “When I asked the shopkeeper, he blamed the increase in POL prices and other issues for the new price.”

He also mentioned excessive prices for various other commodities, including flour (especially chakki atta), rice, pulses and edibles, during the last couple of months on the pretext of rising petrol prices.

“You can check the prices of even fruits and vegetables that are increasing daily on the pretext of growing transport charges caused by the hiked POL prices. Hoarding of various commodities to create artificial shortage in the open markets and earning more profit is another factor behind this self-created price hike,” Farrukh explained.

The Lahore deputy commissioner and industries department secretary were not available for comments, but a spokesman for the Lahore district administration dispelled the impression, claiming a price control system was in place in districts.

“A district price control committee, whenever it requires meeting, revises and notifies the rates of various commodities after holding discussions with the representatives of consumers, traders, shopkeepers and manufacturers. It decides and notifies the rates in line with the increase in the POL prices and other factors such as inflation,” he explained, adding that the notified rates were implemented by price control magistrates in letter and spirit.

However, he admitted there was no dedicated team of experts within the district administration that could develop a mechanism to perform this job. “But our magistrates are effectively controlling the prices,” he insisted.

While on one hand prices continue to sky-rocket, the restrictions on business hours of open markets have also provided an opportunity to shopkeepers to fleece customers and charge exorbitant rates.

It has been observed that some shops, especially those selling drinks and cigarette corners and kiryana stores, remain operational (with their shutters either completely down or half shut) even after the 9pm restriction on business hours in connivance with the police or the district administrations.

“Yesterday I went to a shop that was open with its shutter half closed. I bought sandwich bread for Rs200 -- Rs20 higher than the actual price. When I asked, the shopkeeper told me to buy it or leave as they were about to close. I had no option but to relent,” Arsalan, a customer, told Dawn.