The Ministry of Commerce and Industry confirmed that the countries involved in setting commodity prices, including Kuwait, were negatively affected by the hike in prices through the decrease in the availability of commodities and their smuggling.
The Ministry informed the Council of Ministers that the continued subjection of some commodities to the pricing system is what led to the interruption of some commodities, revealing that different kinds of oils are currently being cut off from the Kuwaiti market, reports a local Arabic daily.
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.
The ministry explained that the state’s role in confronting the rise in global prices was as follows:
● the Council of Ministers issued a decision assigning the authorities to implement the recommendations of the Advisory Committee on Prices.
● the Ministry of Commerce and Industry has addressed all relevant authorities to implement what is relevant to it.
● the continuation of the ration card system contributes to mitigating the impact of the global rise in prices.
An appropriate budget has been set aside to cover the rising costs of basic commodities.
The ministry had put 3 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 is between two directions, which are high prices or the interruption of commodities.
3 suggestions presented by the Ministry are as follows:
The first suggestion: liberalizing prices and pricing for specific goods
► Ensures that prices do not rise suddenly
► Guiding the pricing of commodities
► Implementation of Cabinet Resolution No. 282 of 2022.
The second suggestion: cancel the price fixing decision
► Increase the per capita portion of frozen chicken
► Increasing the support of frozen chickens with the 6-month ration
► Implementation of Cabinet Resolution No. 282 of 2022.
The third suggestion: the gradual liberalization of prices
► Control prices in a way that does not affect price inflation over a period of two months
► Ensure its balance with neighboring markets
► Increasing the per capita portion of frozen chicken to 3 kilograms
► Increased support per kilogram of chicken for 6 months
► Implementation of Cabinet Resolution No. 282 of 2022.
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