The holy month of Ramazan and price hikes come together. Despite the government’s efforts to control the prices of essential items of daily use, the profiteers and market manipulators continue to play their tricks.

Due to the increased demand of certain food products during the month, like fruit, sugar, etc, prices begin to inch up. This is due to the gap between supply and demand. Many consumers tend to buy more than they need. But it is also a fact that unscrupulous traders take advantage of the situation to fleece the public. While inflation may have come down in recent months, poor households still find it difficult to survive. On top of this is the Ramadan-related price hike which further erodes their purchasing power.

Ahead of Ramazan, the Punjab government moved to regulate the prices of essential commodities and the authorities concerned prepared baseline data to ensure effective price monitoring. In a high-level meeting , it was decided that the prices of food items recorded on February 24 would serve as the baseline, against which prices during Ramazan would be compared. Administrative officers in their respective zones were asked to ensure the availability of food items at officially-fixed rates. For this purpose, it was decided to mobilize price control magistrates in the field to closely monitor the demand and supply of essential commodities, ensuring that no shortages of fruits, vegetables, or other items occurred.

However, according to media reports, with the arrival of Ramazan the prices of fruits and vegetables have skyrocketed, as profiteers openly disregard the official rate list. In markets, essential items are being sold at inflated prices. For example, despite the official rate of onions being set at Rs80 per kg, they are being sold for Rs100. Tomatoes, potatoes, garlic, and ginger have also seen sharp price hikes, with ginger reaching Rs450 per kg against the official rate of Rs370. Fruit prices have also surged, with apples selling for Rs300-400 per kg, bananas ranging from Rs220 to Rs350 per dozen, and guavas at Rs250 per kg. Citrus fruits, including kinnow and malta, are priced between Rs200-400 per dozen, while melons cost Rs150-250 per kg.

It may be added here that short-term inflation measured by the Sensitive Price Index (SPI) rose by 0.38% for the week ending February 27, 2025, driven by rising prices of essential food items ahead of Ramazan, according to the latest data released by the Pakistan Bureau of Statistics (PBS). The most significant increases were recorded in tomatoes (11.49%), bananas (8.32%), eggs (5.43%), chicken (4.13%), potatoes (2.79%), onions (2.04%), beef (1.68%), sugar (1.55%), and cigarettes (0.51%). On a year-on-year (YoY) basis, inflation increased by 0.32%, with notable price hikes observed in ladies’ sandals (75.09%), moong dal (28.47%), bananas (27.78%), gram pulse (25.93%), powdered milk (25.86%), beef (24.12%), potatoes (23.24%), garlic (17.26%), and vegetable ghee (16.29%).

In the given situation, the authorities concerned need to move quickly to stabilise the market. The first step in this direction is to provide direct targeted subsidies to low-income groups in the shape of cash transfers or special bachat or Ramazan bazaars. With the Utility Stores facing an uncertain future, the need for such bazaars selling subsidised items is even greater. Minister for Industries and Production Rana Tanvir recently informed the House that the federal government has prepared a Rs20 billion Ramazan package, double the amount budgeted in the current year, which will be extended directly in cash to approximately 4 million deserving people. The amount per beneficiary is Rs5,000, which with an average beneficiary family of 5 implies Rs1000 per head for Ramazan. It is important that the cash subsidy be provided to the needy at the earliest possible.

In the larger context, price control mechanisms should be strengthened to break the nexus between hoarders and price sharks. Beyond the immediate problem of Ramazan price hike, measures need to be taken to control and stabilise the general price situation. Effective price control is required year-round to stop profiteering by greedy traders.

Some time back, the government raised salaries of its employees by 20 to 25 percent in the budget – a raise that was well above the rate of inflation. But government employees (civilian as well as military) paid with the taxpayers’ money account for only 7 percent of the country’s total workforce. The government should also consider the plight of the remaining 93 percent of the workforce that operates in the private sector, which has been unable to get a pay raise in years to keep up with the high rates of inflation. To ameliorate the condition of this hige workforce, it is vital that consumer prices generally are kept under control. And this can be achieved only through long-overdue structural reforms which should not be further delayed.