The federal government has directed the Utility Stores Corporation (USC) to end all subsidies on essential food items, resulting in dramatic price increases for staples such as flour, ghee, sugar, pulses, and rice. This abrupt withdrawal of subsidies has left vulnerable groups without critical financial relief.
Sources indicate that utility stores are included in the privatization list, and a decision regarding their future remains pending. Previously, subsidies were available to individuals with a monthly income of less than Rs. 40,000. The recent decision to halt these subsidies was made during a recent federal cabinet meeting.
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As a result of the subsidy removal, the price of 1 kg of ghee has surged from Rs. 380 to Rs. 450, while a 10-kg bag of flour now costs Rs. 1,500, up from Rs. 648. Sugar prices have increased from Rs. 109 to Rs. 160 per kg, and rice has risen from Rs. 320 to Rs. 340 per kg. Pulses have also seen significant price hikes, with Daal Chana and Daal Moong now priced at Rs. 260 and Rs. 330 per kg, respectively, and white channa at Rs. 380 per kg.
The immediate impact on consumers is severe, as prices at USC have now nearly matched those in open market shops. Additionally, the Economic Coordination Committee (ECC) recently approved a higher rate of monthly subsidies for USC per household, alongside a turnover tax of 1.25 percent on the corporation.
