Families feel price pinch at every turn

The prices of consumer items, as well as goods and services, have gone up significantly in the past month, according to the Department of Census and Statistics (DSC). The inflation rate, meanwhile, has almost doubled over the past year.

The monthly expenditure of an average Colombo family has increased by Rs. 171 over the past month, in a trend of rising prices observed since beginning the of the year. According to the DSC, the rate of inflation over the last six months was greater than it was for the whole of 2007, attributable mainly to rising food prices and soaring fuel costs. In May 2007 the inflation rate was 13.2 percent, and in May this year it was 26.2per cent.

D. C. A. Gunawardena, the DSC’s Prices and Wages Division director, told The Sunday Times that higher priced food items and increases in electricity tariffs and fuel prices had contributed to the high inflation rate. He said Sri Lanka had one of the highest inflation rates in South Asia.

Since May last year, prices of carrots, tomatoes, green chillies, beetroot, cabbage and coriander had more than doubled. The price of an average lunch packet has gone up by Rs.10 to Rs.20 over the past month; a 120-gram cake of soap has increased by around Rs. 2 over the past two weeks.

Meanwhile, the past six months have also seen a sharp rise in the cost of textiles and ready-made garments. According to Fauzul Hameed, managing director of menswear specialist Hameedia, clothing items have gone up by 20 percent to 30 percent as a result of increased production costs. He said the industry was being hit by taxes from all sides.

“We have to pay Customs duty, VAT, a social responsibility levy, a port levy, a turnover tax, EPF and many more taxes,” he said. “Demand for clothes is falling. There’ll be serious problems for us if the government does not relax some of the taxes.”

Meanwhile, car owners have noticed that running and maintaining a vehicle is costing a lot more. The owner of Sanjaya Motors said the price of paint had doubled, from Rs. 700 to Rs.1,400 in just one year. A paint job that cost Rs. 20,000 in January would now cost between Rs. 7,000 to Rs. 8,000 more. “And a polishing job we would have charged Rs. 3,000 for in January now costs around Rs.4,500,” he said.

Meanwhile, transport costs have gone up in the past few weeks as a result of increased domestic fuel prices. Bus fares went up by 27.2 percent last month, although Gemunu Wijeyratne, president of the Private Bus Owners Association, gave an assurance that that there would be no annual bus fare increase later this year.

Trishaw drivers say they are paying more for fuel but cannot raise their minimum charge of Rs. 50 because passenger demand has dropped.

Sudil Dayaruk, president of the All Island Three-wheelers Association (ATWA), said a large scale project to convert all trishaws from petrol to gas was in its early stages. “The cost of converting a trishaw is about Rs. 45,000, but if it’s done on a big scale, it would be about Rs.30,000,” he said.

A litre of petrol is Rs. 157, while a litre of gas is Rs. 80. Mr. Dayaruk said there was a difference of only about one kilometre in the distance covered on a litre of gas. He stressed the “more eco-friendly” aspect of the gas option. He said the government has approved a proposal to grant interest-free loans to encourage trishaw drivers to make the conversion.