The government is able to reduce food, consumer and construction prices in the country by 10 to 20 percent through many means and a reliable 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 failed to see the light of day, reports a local Arabic daily.
Moreover, the daily has 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 due to two main things:
1 – The rise in prices in the country of origin, whether in terms of the fully imported product or the raw materials used in manufacturing.
2 – 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 added 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 air-conditioned locally, and this is not consistent with the nature of the local market, which imports 95 percent of its consumer products from abroad.
She pointed out that this suffering of suppliers from the scarcity of stores was evident in a large number of local companies 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 to raise their storage levels for goods for more months. , which forced them to resort to government agencies to request storage spaces, which were unable to meet their requests.
The sources stressed the need for the government to expedite the process of liberating lands for storage, because of this step’s benefits in extinguishing part of the price fire that commodities are exposed to in Kuwait, in addition to taking such a step will achieve 7 results:
1- Helping companies and importers to solve storage problems and increase their strategic stock for longer periods.
2 – Knowing the strategic stock of commodities in Kuwait, evaluating their prices and preventing any artificial rise in them, before and after crises, as happened during the Corona pandemic and the war of Russia and Ukraine.
3 – Correcting municipal violations in investment buildings, which are now crowded with irregular warehouses.
4 – Reducing the percentage of fires in investment areas caused by random storage operations in the absence of security and safety procedures.
5 – Exploitation of some large vacant state properties and transform them into generating lands for the state treasury by collecting rental fees.
6 – The establishment of public joint stock companies for storage has become an urgent matter, as it has benefits for citizens, as their invitation to subscribe in them and own their shares has been distributed, especially since the activity is highly profitable, and therefore the dividends in it will be rewarding.
7 – Providing storage areas in various governorates of Kuwait in accordance with the best international storage standards, which contributes to improving the business environment in Kuwait, facilitating supply chain operations, and is considered an important attraction for foreign investors.
