Today’s prices gone tomorrow

By Nalaka Nonis and Nadia Fazlulhaq

With the CoL galloping furiously out of reach of consumers and prices changing almost on a monthly and sometimes even weekly basis, the purchasing power of consumers is dropping drastically with some even cutting down on essential goods. M. Gnanam, who has been working for more than 20 years at a retail shop in the Manning Market, said prices of most goods have gone up in recent months despite repeated assurances by govt. officials that prices were stable. The retail prices of several essential items too have increased considerably in recent months.

Onions, potatoes and garlic: On the rise. Pic by Berty Mendis

A kilo of Bombay onions has gone up from Rs.43 to Rs.60 in the last two months, while dried chillies are now being sold at Rs.180 a kilo compared to last month’s price of Rs. 160.

A kilo of potatoes and garlic which were both Rs. 75 last month are now respectively Rs. 80 and Rs. 125 a kilo. A kilo of dhal is being sold at Rs. 90 to 110 at the retail market while prices of several dried fish have gone up by at least 25 percent last month. A kilo of sprats that was sold at Rs. 170 to 180 last month is now going at Rs. 220.

S. Shaheeda of Thimbirigasyaya said with essentials such as flour, dhal and milk going up in price, this week, for her household of six she spent Rs. 9,000 while last week she spent Rs. 7,000.

Highlighting another dimension, traders in Pettah complained that most people now avoid coming to Pettah to make purchases because of the prevailing security measures and have opted to shop at super markets. H.E. Kusumadasa of Wickremasekera Traders in Pettah said he and other retail businessmen were facing hard times as there was a considerable drop in the number of their customers and they were surviving on what they supply to selected clients.

Jagath Prasanna from Pettah said the increase in the price of goods including red rice, bread, vegetables and the increase in the prices of gas and other fuel had affected the lifestyle of people with most opting to buy prepared food rather than cooking at home.

Vegetable traders complain that the ever increasing transport charges have affected the price of some vegetables including beans, tomatoes, ash plantains, carrots, lime and green chillies.“Last month a kilo of green chillies was Rs. 75 but today it’s Rs. 180 and 250 grams of lime is sold at Rs.22 compared to last month’s Rs. 10,” said W.D. Hector, a vegetable seller in Pettah.

K. Palaniandi Sundaram, President of the Old Moor Street Association said they were finding it difficult to set a controlled price limit on essential items as the transport charges kept changing due to fluctuating fuel prices.

“The Trade Minister should take steps to encourage traders to import more goods and create a competitive market. He should also take steps to reduce storage charges, and the prices would eventually come down,” he opined.

He too lamented that security concerns were affecting business in Colombo and the suburbs. “Because of these uncertainties, businessmen are wary of importing goods in big quantities. However, if the government could give an assurance that they would create a better market environment, it would help to curb the soaring CoL,” he said.

Fuel and electricity: Higher and higher?

By Malik Gunatilleke

A committee appointed by the cabinet to look into the proposed fuel and electricity price adjustments will meet tomorrow to decide on possible increases, Minister of Petroleum and Petroleum Resources A.H.M. Fowzie said.

Following protests, the government decided to halt the six rupee fuel hike which was to be approved after a special cabinet meeting on Monday, June 4. The cabinet, then appointed a committee to make decisions on future price adjustments on fuel and electricity.

Minister Fowzie, a member of the committee, told The Sunday Times that they would be discussing the effect fuel hikes would have on state institutions such as the Ceylon Electricity Board (CEB) which uses diesel as a power generating source.

The others in the committee include Minister of Trade and Consumer Affairs, Bandula Gunawardena, Minister of Construction and Engineering Services, Rajitha Senaratne, Minister of Special Projects, Mahinda Wijesekara, Transport Minister Dallas Alahapperuma, and Minister of Power and Energy, John Seneviratne.

Minister Fowzie said the committee would review the various requests made by the CPC and CEB to increase prices and tariffs and added that they would not be allowed to increase prices until the committee had approved the raise.

Meanwhile, CEB officials complain that they are finding it difficult to cope with unnecessary expenditure due to the government’s inability to make a decision quickly.

According to an agreement between the two institutions, the CEB was to purchase diesel from the CPC at a special cut price of Rs.55 a litre. However, as a result of the recent fuel hikes that price increased to Rs.64 a litre prompting the CEB to request the government for a hike in electricity tariffs.

A spokesman for the CEB said that in January the government had said that the diesel prices would remain the same throughout the year, but by April it was increased by Rs.9 causing a sudden increase in fuel expenditure.

“When the CPC increases the price of diesel, naturally the CEB cannot afford to bear the cost. So a tariff increase will be necessary or the government should provide a subsidy,” the CEB spokesman said.

Minister of Power and Energy, John Seneviratne said that the reported low water levels may cause problems for the CEB as the hydro power plants may not be able to generate the required amount of power, which in turn may cause the CEB to look to their thermal power plants for power generation. However, since thermal power plants need diesel as their main source of power, this may be a costly affair for the CEB.

“When the country does not get sufficient rain, it depends on thermal power plants for electricity generation. However, the current fuel hikes that are being discussed may make this a costly procedure for the CEB,” he said.

Meanwhile, the use of thermal power plants may prove to be even more troublesome for the CEB with the CPC awaiting the approval to increase fuel prices by a further Rs.6 within the next few weeks.
Minister Seneviratne said that the relevant authorities are currently discussing methods of cushioning the effect of the fuel hikes.

However, the government is yet to give a final decision on the application submitted by the CEB requesting a tariff increase. The CEB claims that if the proposed fuel hikes are approved, the institution will incur daily losses of upto Rs.50 million.

Minister of Trade and Consumer Affairs, Bandula Gunawardena, said that the Consumer Affairs Authority is given 30 days within which to evaluate the proposals and give a decision on such price increases.

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