The federal government has ordered the termination of all subsidies on essential food items at the Utility Stores Corporation (USC), resulting in a sharp increase in the prices of staples such as flour, ghee, sugar, pulses, and rice.
This sudden withdrawal of subsidies has significantly impacted vulnerable groups, leaving them without crucial financial support. Sources indicate that utility stores are currently included in the privatization list, with their future yet to be determined. Previously, subsidies were available to individuals earning less than Rs. 40,000 per month. The decision to end these subsidies was made during a recent federal cabinet meeting.
As a result, the price of 1 kg of ghee has risen 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 the price of rice has gone up from Rs. 320 to Rs. 340. Pulses have also seen substantial 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 has been severe, with prices at USC now nearly matching those in open market shops.
In a related development, the Economic Coordination Committee (ECC) recently approved an increased rate of monthly subsidies for the USC per household, along with a 1.25 percent turnover tax on the corporation.