Ballooning prices set to hit festive spirit
Kathmandu, September 18
Amid constant weakening of Nepali currency vis-à-vis the US dollar already pressuring market inflation, soaring prices of petroleum products is expected to inflate prices further ahead of the festive season.
As fuel prices are directly related to transportation cost, the prices of merchandise goods will be dearer during the upcoming festive season against the backdrop of Nepal being an import-based economy, say traders.
Increasing fuel prices and weakening Nepali currency will certainly raise the retail cost of apparels, food items, electronic equipment and vehicles that are imported via India and third countries, as per Pashupati Murarka, immediate past president of Federation of Nepalese Chambers of Commerce and Industry. The Nepali currency has slumped by over 12 per cent against the US dollar to over Rs 115 since January, while price of diesel has increased by Rs 21 per litre to Rs 101 over the same period.
“Constant appreciation of the US dollar and increasing fuel prices are alarming for Nepal’s trade. As a majority of Nepal’s imports is from India, which too is suffering from the global rise in gasoline prices and weakening Indian currency, the two factors will have more negative impact on the country’s trade and market,” said Murarka.
He added that surging transportation cost in the Indian market, as well as in Nepal, owing to rise in fuel prices and weakening value of rupee against the US dollar would make imported merchandise dearer by at least 15 per cent this year. “The festive market is bound to be dearer this year,” he added.
Livestock traders have been saying that price of goats will go up by almost 20 per cent this Dashain due to surging transportation cost owing to ballooning fuel prices and bad roads.
Though the appreciation of the US dollar and its impact on the country’s merchandise trade and inflation might not be under the government’s control, consumer rights activists say inflationary pressure can be reduced by controlling fuel prices. “We have funds meant for stabilising fuel prices. However, Nepal Oil Corporation and other related government agencies are not adopting any measure to control inflation in fuel prices,” said Madhav Timalsina, president of Consumer Rights Investigation Forum.
The government had set up Price Stabilisation Fund in 2015 to control fuel prices. Today it has deposits of over Rs 3.5 billion. For its part, NOC has been defending the fuel price hike, stating that it is necessary to prevent NOC from incurring huge financial loss.
Timalsina said effective market inspection from the government in the festive season could control arbitrary rise in prices of goods.
Meanwhile, the Department of Supply Management and Protection of Consumer Rights is preparing to deploy dedicated market inspection teams targeting the upcoming festival. “We cannot do anything when the prices
of goods are raised on logical grounds. But we’ll ensure there is no artificial hike in prices of merchandise,” said Yogendra Gauchan, director general of DoSMPCR.