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‘Continued pricing system led to interruption’
KUWAIT CITY, June 5: The Ministry of Commerce and Industry confirmed that the countries involved in setting commodity prices, including Kuwait, were negatively affected by the rise in prices for two reasons, unavailability of commodities in the market and to a large extent goods destined to one country diverted to elsewhere, reports Al-Qabas daily. The Commerce Ministry informed the Council of Ministers that the continued subjection of some commodities to the pricing system is what led to the interruption of supply of some commodities, revealing that all kinds of oils are currently being cut off from the Kuwaiti market. The sources said the cooperative societies have deviated from their service role, and the lack of commitment by some cooperative societies will cause hike in the prices of goods sold in these cooperatives.
The ministry says correcting the impact of the food security shock on the global economy depends on Kuwait’s ability to contain the Corona crisis and enhance its resilience in the short term, because in the long term the correction will be ineffective. The ministry indicated the text of Article Three of Decree- Law No. (79/10) says: Some commodities may be subject to the pricing system, and it is issued to specify these commodities and prices specified by a decision of the Minister of Commerce and Industry, listing 5 disadvantages of price stabilization.
Meanwhile, the ministry sources pointed out that there is no doubt that those inflationary pressures, which appeared much faster than expected, and even faster than the inflationary pressures, which followed the global financial crisis in 2008, the main reason was due to the rise of basic commodities and pressure at global level. In a presentation to the Cabinet, the ministry touched on the product’s journey until it ends up on the display shelf, noting that it includes, ports and fees not shown, customs and customs clearance and their fees; the regulatory authorities and their fees and high storage charges, etc. The ministry explained that the state’s role in confronting the rise in global prices was tied to the decision of the Council of Ministers assigning the authorities to implement the recommendations of the Advisory Committee on Prices.
The Ministry of Commerce and Industry then has addressed all relevant authorities to implement what is relevant to it and the continuation of the ration card system to mitigate the impact of the global rise in prices. An appropriate budget has been set aside to cover the rising costs of basic commodities and the ministry placed three options before the Council of Ministers to contain the food security shock, represented in liberalizing prices and pricing limited commodities or canceling the price stabilization decision, or gradual liberalization of prices, noting that the current situation in Kuwait gives two options – high prices or the interruption of commodities. The three suggestions presented by the Ministry include liberalizing prices and pricing for specific goods, cancelling the price fixing decision and gradual liberalization of prices.