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Skyrocketing prices: Consumers struggling to survive 

02 Apr 2022

  • Surging cost of living crushes festive joy   
  • Price of essential commodities have doubled
  • Retailers claim they are incurring losses
By Maheesha Mudugamuwa  For Inoka Perera, a resident of Kottawa, the rising prices of most commodities have taken the charm out of spending during the upcoming Sinhala and Tamil New Year festival. Perera, a 45-year-old mother of two school-age children, claimed she and her husband were struggling to make ends meet on a daily basis due to the soaring costs of fuel, transport, food items, and many other essential services. “Usually, we celebrate the New Year in grand style. We used to buy new clothes for all our relatives, make sweets and other food items, colourwash our houses, and sometimes change some of the furniture. We used to travel a lot to visit our relatives. But now all of these have just become a dream,” she stressed, adding that she and her husband had collectively received a considerably good monthly income but now they could not even do half of what they did a year ago.   “We have cut down all non-essential expenses and we spend carefully even for food. We have cut down meat consumption because we can’t afford it. We give eggs only to our children,” Perera lamented.   Millions of Sri Lankan households are facing similar strains on their budgets ahead of this year’s Sinhala and Tamil New Year. The New Year festival marks the country’s busiest shopping season for consumer goods. The recent fuel price adjustments as well as the rupee depreciation has severely affected the local market prices.  Prices of many essential commodities have doubled within a span of just a few weeks. As the Central Bank of Sri Lanka (CBSL) decided to float the rupee in an attempt to resolve the existing foreign exchange shortage, prices of almost all imported household essentials such as milk powder, dhal, onion, sprats, sugar, and coconut oil have increased drastically, while some items such as domestic gas have seen a shortage in supply.  However, traders claim that prices are fluctuating on a daily basis due to the variations of the dollar rate in the market. They stressed that the present situation had negatively affected entire businesses as consumers had now limited their expenses as well. Speaking to The Sunday Morning, K. Fernando, a retailer in Nugegoda, claimed that even retailers were unable to secure stocks unlike before. “We too have no money and we sell the goods for a very small profit. With some items, we do not keep a cent of profit for ourselves as we see how difficult it is for many consumers.” “Many customers are now buying only 250 g of dhal. This is very pitiful because I know that these people are not used to purchasing like this. What can you buy for Rs. 1,000 now? Only a packet of milk powder and a packet of small biscuits. People can’t live like this. Many are now avoiding buying milk powder,” he stressed. Several weeks ago, soon after the Government decided to relax currency controls, the rupee depreciated to 260 per US Dollar. However, at present, as per CBSL figures, the selling price of a dollar has increased to Rs. 298.    Meanwhile, fuel prices have also increased drastically within a very short period. Last week, Lanka IOC, a fuel retailer that accounts for a third of the market, raised the petrol price to Rs. 303 per litre, up from Rs. 254. Two weeks ago, the company increased the price of petrol by 25%. The company said that the 30% depreciation of the rupee against the US Dollar and other major currencies during this month had fuelled the increase. Further, the Ceylon Petroleum Corporation (CPC) raised the prices of 92 octane petrol by Rs. 77 and auto diesel by Rs. 55.   As the rupee depreciation directly affects import-based businesses, Essential Food Commodities Importers and Traders’ Association (EFCITA) President G. Rajendran told The Sunday Morning that they were currently incurring losses as they had already dispatched the food items that they had imported and released when the dollar was at Rs. 202, while the dollar had now increased to over Rs. 270. “We are incurring losses. We usually bring down items on credit. We have had bills to pay for the past two or three months. Since the dollar has now gone up drastically, we have to pay those bills at the current rate,” he explained. When asked whether there would be a shortage, Rajendran stressed that it would depend on the dollars issued by the banks.   National Movement for Consumer Rights Protection (NMCRP) Chairman Ranjith Vithanage said that almost everyone was suffering due to the high cost of living. “Many people can’t afford the high prices. Also, there is no electricity or diesel. This has made life hard for many, and has directly affected a number of businesses,” he noted, adding that the prices of almost all commodities had increased. “During this festive season, we used to buy new clothes. But now we can’t afford it. The prices of all clothes have gone up. Even in Pamunuwa we see a drastic increase in prices,” he lamented. All Island Canteen Owners’ Association (AICOA) Head Asela Sampath stressed that their business had at present declined by nearly 50% as customers were not spending on food like they used to. “Many are now buying plain tea and vadai because they can’t afford anything else. We are also forced to increase the prices as we had to buy essentials at higher rates. We don’t want to burden the consumers more by increasing prices, but we can’t control this,” he shared, urging the Government to immediately ease the present burden by bringing down the prices of essentials and stabilising the economy. However, in February, President Gotabaya Rajapaksa instructed officials to take immediate steps to release containers of essential items held up at the Customs, in order to prevent any shortages in the market. The President has appointed a committee headed by Finance Minister Basil Rajapaksa to ensure that there is no shortage of essential commodities including food. At a special discussion held at the Presidential Secretariat recently with regard to the release of essential goods held up at the Customs, President Rajapaksa stressed the importance of providing the people an opportunity to purchase essential items including food without any shortage during the forthcoming festive season and instructed officials to make plans promptly. He also stressed the need to allow the import of selected essential commodities and not to allow over-importing and stockpiling of goods with malicious intent. However, when asked about the high prices of essential items, State Ministry of Cooperative Services, Marketing Development and Consumer Protection Secretary K.D.S. Ruwanchandra told The Sunday Morning that the Government would announce a concession for the upcoming New Year. He also noted that prices would remain high until the existing foreign exchange crisis ended. Further, the State Ministry Secretary noted that actions would be taken against those who sold essential items at extremely high prices if a complaint was lodged with the Consumer Affairs Authority (CAA). However, attempts made by The Sunday Morning to contact Trade Minister Dr. Bandula Gunawardena and Ministry Secretary Bhadranie Jayawardhana were futile.   According to the CBSL Daily Price Report, as of 31 March, the prices of several essentials such as big onion (imported), potato (local), potato (imported), dried chili (imported), coconut oil, dhal, sugar, egg, and sprats at the Pettah wholesale market were at Rs. 188, Rs. 189, Rs. 172, Rs. 1,400, Rs. 803 (per litre), Rs. 437, Rs. 228, Rs. 27.50, and Rs. 1,100 respectively, and at Narahenpita, the retail prices were at Rs. 220, Rs. 280, Rs. 200, Rs. 1,200, Rs. 870, Rs. 480, Rs. 230, and Rs. 30.50 respectively (excluding sprats). However, the prices of the same essentials during the same period in 2019 at the Pettah wholesale market were Rs. 51, Rs. 110, Rs. 81, Rs. 280, Rs. 340, Rs. 117, Rs. 94, Rs. 16.50, and Rs. 500 respectively.  


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