Consumers brace for new wave of price spirals

Already hard-pressed amid surging prices of almost all essentials, the government on Wednesday added fuel to consumers’ misery by increasing the General Sales Tax (GST) to 18 per cent from 17pc along with federal excise duty. However, the manufacturers have yet to give any respite in prices despite over Rs11 recovery in the rupee’s value, which makes the import cost of raw materials and finished goods cheaper. Pakistan Vanaspati Manufacturers Association General Secretary Umer Islam Khan estimated a jump of Rs3 to Rs5 per kg/litre in ghee and cooking prices after the GST hike. He said commercial banks are still showing reluctance in opening letters of credit (LCs) for importing edible oils. Usually, shipments take around 45-60 days to arrive at Karachi ports after the opening of LCs. “If this situation persists the industry would be unable to meet the demand for ghee/cooking oil in Ramazan,” he warned. Costly steel and cement Agha Steel Industries also raised the price of steel bars of 16-32mm and 10-12mm sizes to Rs304,000 and Rs306,000 from Rs300,000 and Rs302,000 citing a hike in GST. Naveena Steel Mills has issued new prices of Rs305,500 (16-32mm) and Rs307,500 (10-12mm) from Rs301,500 and Rs303,500.