CAA to be amended to safeguard consumers' interest

by Lalin Fernandopulle

The Consumer Affairs Authority Act (CAA) will be amended in March to give more powers to the Minister of Trade to deal with the market and safeguard the interest of consumers, said Secretary, Ministry of Trade, Marketing Development, Co-operative and Consumer Services, Dr. R. M. K. Ratnayake.

He said the present Act does not provide adequate powers to the Minister to regulate and monitor the prices of essential commodities. The new Act will strengthen the powers of the Minister to deal with the market.

The CAA Act will be amended to safeguard the interests of traders and consumers in areas such as price escalation, hoarding and ensuring good business practices.

Though the CAA was set up to regulate and monitor prices of commodities and take action against errant traders in the recent past companies and traders have randomly increased the prices of consumer items without the approval of the CAA.

The Secretary said the CAA had to approve price increases for certain companies due to the escalation of the world crude oil price. Oil prices have a ripple effect on the prices of consumer goods and a price revision is inevitable.

Laugfs and Shell Gas companies had to revise the price per LPG cylinder in keeping with the Aramco Price Index of Saudi Arabia. Gas prices will be revised according to the price mechanism formula agreed upon with the CAA.

"The CAA has no powers to regulate the price of wheat flour of Prima Ceylon Ltd. which has a longstanding agreement with the Treasury", he said.

The price of wheat flour is expected to escalate throughout the year due to the predictions by analysts that there will be a major food shortage in the world.

According to the Strait Times the price of wheat flour has risen above US$ 10 a bushel for the first time leading to rise of other grains and oil seeds, in a food price spiral which threatens to derail global economic growth.

The Secretary said the rise in inflation and interest rates and the massive budget deficit is due to the poor fiscal policy of the country. The difference between India and Sri Lanka is that while politicians manage the affairs here, in India it is the professionals who decide.

While the annual earnings of the country from trade and foreign remittances are around US$ 9.5 billion the expenditure is over US$ 12 billion.

"The Ceylon Petroleum Corporation cannot always provide diesel to the Ceylon Electricity Board at a subsidised price. The CPC incurs a massive loss per day and it is the consumer who has to pay for it", he said.