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Saturday , October 1 2022

Price cuts from 10-20% seen possible – ‘Duties … fees’

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KUWAIT CITY, June 5: According to an official source the government is able to reduce food, consumer and construction prices in the country by 10 to 20 percent through many means, reports Al-Qabas daily. The same source said this can be done by working to reduce or temporarily waive the customs duties charged by the General Administration of Customs; cessation of handling fees, flooring fees and others on the main importers of basic materials and local manufacturers; providing storage facilities for local companies and importers, especially that their cost is high and therefore it has a great bearing on the final price of the commodity sold to the consumers.

The source pointed out that this proposal was discussed by the Council of Ministers after what was proposed by the Ministry of Commerce and Industry through an advisory team affiliated with the Minister’s office, but ended up in the drawers to collect dust. In addition, Al-Qabas learned that in 95 percent of the cases of the Ministry of Commerce and Industry’s records of seizures (artificially raising prices) during the past two years, which were registered against companies, suppliers, or commercial stores and referred to the Public Prosecution have reportedly ended up in calling the suspects innocent.

Informed sources said that the defendants, whether they were food, consumer, or construction materials merchants, most of them proved to the investigation authorities that their raising of prices came based on economic feasibility, as their failure to raise the price would end up incurring significant financial losses, citing the reasons for raising the prices of their products and goods and claimed the rise in prices was due to the price in the rise of commodity in the country of origin, whether in terms of the fully imported product or raw materials used in manufacturing.

This is in addition to the high cost of shipping, which in the past two years has witnessed a significant increase, sometimes reaching 200 percent, over the prices that were before the outbreak of the Corona pandemic. The sources said that one of the reasons for the rise in commodity prices in Kuwait is due to several reasons, including the fact that most companies pay customs duties, and the high cost of storage, especially that the price of a refrigerated rental meter ranges between 7 to 8 dinars, in addition to the scarcity of storage spaces, especially airconditioned locally, and this is not consistent with the nature of the local market, which imports 95 percent of its consumer products from abroad.

The sources pointed out that this suffering of suppliers from the scarcity of stores was evident during the Corona crisis, as they had no problem in securing a strategic stock for the goods they were importing, but rather faced a problem in the process of finding additional storage spaces for goods, which forced them to resort to government agencies to request storage spaces, which were unable to meet their requests.

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