ISLAMABAD, March 19: Deputy Prime Minister Ishaq Dar announced on Wednesday that the retail price of sugar should not exceed Rs164 per kilogram, following concerns raised by the Competition Commission of Pakistan (CCP) about price manipulation by sugar mills.
Despite efforts by the government, including directives from the Prime Minister to keep prices at Rs130 per kilogram, retail sugar prices continue to soar, reaching over Rs180 per kilogram in various markets across the country.
The surge in sugar prices is also attributed to increased consumption, which is projected to rise slightly to 6.7 million tonnes due to population growth and higher demand from the food processing industry.
In the previous season, Pakistan produced more than 6.84 million tonnes of sugar, with production expected to rise in 2024-25.
Addressing journalists, Dar expressed concern over the price spike, stating, “According to news reports, sugar prices have surged to Rs178-179, which is obviously not tolerable to the prime minister.”
He further mentioned that a late-night meeting was held to find a solution that would provide relief to the common citizen, preventing prices from rising to Rs180 or even Rs200 per kilogram.
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Dar revealed that a subcommittee would be established, led by Minister for National Food Security and Research, Rana Tanveer, to work on this issue.
The committee will work until April 19 to assess costs and evaluate sugar mills’ claims that they are not responsible for the price increase.
To address the issue, Dar emphasized the need for an efficient distribution system and an implementation mechanism to ensure sugar is more affordable for the public.
FBR Taxation with Price Cap for Sugar
On the matter of sales tax, he mentioned that the Federal Board of Revenue (FBR) would impose a sales tax on sugar at Rs154-155 per kilogram, with a price cap set at Rs159 per kilogram.
The CCP, which has been monitoring the sugar crisis, has warned that strict enforcement actions will be taken if any anti-competitive practices are found.
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The CCP has been investigating cartelization within the sugar industry, which includes coordinated actions by sugar mills, facilitated by the Pakistan Sugar Mills Association (PSMA), to manipulate prices and control supply.
As part of its investigation, the CCP conducted raids in 2021 and imposed a significant Rs44 billion fine on sugar mills and the PSMA for their role in price-fixing, marking one of the highest penalties in its history.
Dar emphasized that implementing a two-tier system would benefit the public, allowing sugar to be sold at a cheaper price, provided the government is satisfied that the system can be enforced effectively.
