CCP opposed proposed plan of privatisation of utility stores


ISLAMABAD: The Competition Commission of Pakistan (CCP) has strongly recommended an increase in the number of utility store outlets and establishment of a centralized monitoring authority at federal level to monitor supply/demand of essential food items amidst reports that government is reconsidering privatisation of utility stores.

The CCP made recommendations amidst reports that government has been considering to privatize the entity to save billion of rupees losses annually incurring to national exchequer. Although, the utility stores were delisted from the list of privatization but selling out corporation is still under consideration of the government.

The CCP recommended that the federal government should increase the number of utility store outlets throughout the country so as to ensure the availability of essential commodities at a lower price. It is suggested that utility stores should also sell perishable commodities like fruits and vegetables. The USC could be run on a franchise model. Private sector partnership would ensure good performance and public ownership would ensure that excessive prices are not charged. Alternatively the government should appoint a committee to monitor the prices charged by utility stores and quality of items on sale.

According to the CCP’s latest report on ‘Review of Framework relating to Control of Pricing and Supply of Essential Commodities,’ a central body to be establishe d may monitor the supply situation and recommend export controls in case of shortages or opening up of exports in case of excess supply.

The federal government can greatly assist in ensuring adequate supply by continuing to take timely decisions to bar export of commodities when a shortfall is expected. If commodities cannot be taken out of the country in times of crisis, shortages can be avoided and traders will be encouraged to ensure supply in the domestic market. This will have a positive impact on prices.

A centralized monitoring authority would enable the timely identification of import needs in case of insufficient domestic supply. Emergency procurement has led to losses to the exchequer which could be avoided if there is a centralized authority monitoring the supply and demand situation and can thus accurately forecast import needs.