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| Sunday, 29 August 2004 |
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Features |  |
| News Business Features Editorial
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The saga of rising prices Blame it on the oil crisis. Skyrocketing global oil prices,that reached an unprecedented US $ 50 per barrel last week has sent prices of all essential consumer items soaring, making life tough for the average wage-earner whose income has remained static.
Just how hard has the increasing fuel prices hit the local market, and how significant is the increase in prices of essential items experienced by consumers? A survey conducted by a team of Sunday Observer staffers in Colombo indicate that despite the inevitable increase in fuel prices, measures have been expedited to maintain a reasonable price range in essential items. Excerpts from the survey: Notwithstanding the increase in fuel prices, vegetable prices reported a clear decline last week, thanks to increased supplies from vegetable growing areas in the up country and Dambulla. Compared to the previous two weeks when prices skyrocketed, this week's rates were considerably low (according to the prices in the vegetable market) For instance the retail price of carrot was Rs. 35-40 per kg at the Manning Market this weekend compared to Rs. 120-130 a kilo two weeks ago. A kilo of leeks was between Rs. 20-25 compared to Rs. 70-80 two weeks ago. Businessmen at Manning Market ruled out oil prices having any significant impact on vegetable prices. "Of course, increase in fuel cost will increase transport charges and it can increase vegetable prices by a small margin" they said. But the main determiner for vegetable prices is demand and supply, they said explaining that the reduction was due to increased supply. One of the dealers said the price decrease this week did not guarantee that the prices will be the same or lower next week. "If more lorries come, price will be lower. If fewer lorries come prices will be higher," he said. Understandably, though there had been a small increase in vegetable prices due to fuel price increase, that increase had been rendered insignificant by the increased supply. Rice Meanwhile, the government last week said that steps had been taken to distribute over 50 tonnes of rice to the open market to bring down the cost. However leading rice dealers warned that the country was likely to experience a 'severe' shortage of rice in the immediate future. A spokesman for the Jayananthan Stores, Pettah said that high prices will continue due to the short supply of rice, as the country does not have sufficient stocks to meet the demand. "Expect the prices to skyrocket," he cautioned, adding that a kilo of samba priced at Rs. 36 (wholesale price) on Thursday would definitely increase during the weekend. According to rice dealers of the Moor Street Bazaar, the crisis in the rice industry is mainly due to the ongoing drought situation in the country. Farmers in Ampara and Anuradhapura had been unable to supply paddy due to poor harvest, with farmers in Polonnaruwa and Batticaloa facing the same predicament. Although the government announced that rice will be distributed at a lesser price through the CWE, stocks are not sufficient to meet the market demand, a salesman attached to the RTS Company Pettah said, adding that it would be impossible to sell rice at Rs. 27 as directed by the government. He also claimed that transport charges have also shot up due to the high fuel prices. The only option to stabilise rice prices is to import rice, a spokesman from the United Stores, Old Moor Street said. "If the government is willing to grant a duty concession to import rice, there will be adequate stocks and the prices will be brought down, he said. Gas Gas prices, directly influenced by the rising oil prices, are set to escalate even further, despite recent price hikes and is expected to reach the Rs. 1,000 figure by year end. Shell Gas Company upped its price by Rs. 70 per cylinder. A 12.5 kg cylinder now sells at Rs. 690. Laugfs Lanka Gas (Pvt) Limited increased its price by Rs. 50 a week later and a 12.5 Kg cylinder is now priced at Rs. 670.00. Chairman of the Consumer Affairs Authority (CAA) Dr. M. I. M. Musheen said that none of the companies had requested approval for a further price hike from the CAA. Prices cannot be adjusted without the approval of the CAA. and Trade Commerce and Consumer Affairs Minister Jeyaraj Fernandopulle has directed the Authority to take legal action against arbitrary price hikes, he said. However, the issue is to be discussed at the next CAA board meeting to be held on September 20. Milk The CAA recently approved a request from milk powder companies to adjust prices. The revised prices are as follows: Anchor (400 gm) from Rs. 131.50 to Rs. 142, Anchor (1kg) from Rs. 323.75 to 347, Raththi (400 gm) from 117.50 to Rs. 126.50, Raththi (1 kg) from Rs. 305 to Rs. 333, Red Cow (400 gm) from Rs. 137.50 to Rs. 148, Red Cow (1 kg) from Rs. 335 to Rs. 366, Nespray (400 gm) from Rs. 131.50 to Rs. 136 and Nespray (1 kg) from Rs. 323.70 to Rs. 332. Fish The prices of fish has also been affected by the fuel price hike. But Murugesu Sellamuttu a fish-vendor at the St. John's Fish Market was confident that if a peaceful environment prevails in the Northern and Eastern provinces, fish prices in the St. John Fish Market would not be increased under any circumstances. He said the recent fuel price hike did not affect fish prices at the Colombo fish market as large quantities had been supplied without any interruption. The Sunday Observer team that visited the Colombo St. John Fish Market on Thursday observed that there was no price difference in fish sold before the fuel price hike and after. Sellamuttu said that even in the past, when the price of diesel went up, it was not the fish vendors at the St. John Fish Market who gained but the ordinary fish sellers in villages. "They used to buy fish from us at a reasonable rate and sell them at exorbitant prices, deceiving the ordinary customers, blaming the authorities for the increase in the price of fuel," he said. Sellamuttu also said that if there was an uninterrupted supply of fish to the Colombo Fish Market, the price of fish would remain stable. "To my knowledge, fish prices at the St. John Market increased by 20 per cent only on one occasion when diesel price went up. This was due to the poor supply from distant areas. This situation was created by lorry owners at that time to show their protest over the price hike, he added. At the St. John Fish Market on Thursday, a kilo of some varieties of fish such as Seer was sold between Rs. 200 to 300, Talapath from Rs. 230 to Rs. 250, Hurulla from Rs. 70 to 90, prawns from Rs. 220 to Rs. 450, crabs from Rs. 180 to 220 and Salaya from Rs. 50 to 70. Gamini Anthony, another fish vendor and an owner of two fish stalls said that the price of fish had remained unchanged for the past two weeks due to large stocks of fish coming from every part of the country including Jaffna, Mulaitivu, Mannar, Batticaloa, Trincomalee Galle, Matara, Negombo and Beruwala. "If the fish supply from the Northern and Eastern districts stops prices will go up by 30 to 40 per cent" he said, explaining that fish prices do not depend on fuel prices. According to the Department of Census and Statistics the Cost of Living Index for the month of July rose to 3675.7 from 3672.8, in June indicating an increase of 1.3 per cent. An official said that the increase could be considered as 'somewhat high.' The CoL has been on the increase since April this year. However, the increase had been marginal in May and June, the official said, adding that the skyrocketing prices of petroleum products and other consumer products during past few months had contributed to the increase. The corresponding CoL index figure of the previous year was 3376.3 and indicates an 8.9 percent increase, the official added. |
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News | Business | Features
| Editorial | Security Produced by Lake House |
Petrol prices went up by Rs. 11 per litre, diesel prices by Rs. 4 and
gas, especially Shell, leap frogged by Rs.70. The price of milk powder
followed the upward trend with train and bus fares soon to follow suit.
The cost of living has taken a direct hit and consumer discontent is
gathering momentum.
