ISLAMABAD:A parliamentary panel, led by MNA Atif Khan, is considering the imposition of a windfall tax on sugar millers following a sharp rise in sugar prices. This move comes as a response to concerns over price manipulation and a growing demand for stricter industry oversight, according to a news report.
Atif Khan will lead the inquiry, joined by other parliamentarians including Mirza Ikhtiar Baig, Shahida Rehmani, and Farhan Chishti.
Last week, the National Assembly Standing Committee on Commerce, chaired by Jawed Hanif Khan, criticised the sugar industry for driving up prices and formed a multi-party panel to investigate the causes behind the price surge, the role of sugar exports, and the cyclical nature of the industry.
To prevent further price manipulation, the newly formed parliamentary panel is exploring the imposition of a windfall tax on sugar millers’ profits, aiming to curb the influence of the Pakistan Sugar Mills Association over pricing and ensure fairer market conditions. The tax would target mills that have benefited from price increases linked to export-driven demand.
In addition to examining the viability of this tax, the committee is investigating the role of sugar exports in driving domestic prices higher. Previous assurances from the PSMA that sugar prices would not exceed Rs140 per kg have failed to hold, leading to public outcry and a renewed government effort to control the industry’s pricing mechanisms.
The proposed windfall tax, along with the potential importation of sugar, could help stabilize prices and address the ongoing market volatility. The committee’s findings and any subsequent government actions will play a crucial role in shaping the future of Pakistan’s sugar sector and its pricing policies.
Currently, sugar prices are exceeding government-set limits. Retail prices are hovering around Rs200 per kilogram, despite an agreement between the government and the PSMA to fix the ex-mill price at Rs165 per kg, with gradual increases over the next few months. Retailers, however, have not adhered to these prices, contributing to the price spike.
The Ministry of National Food Security and Research has raised concerns about the Rs2 per kg monthly increase, which was originally based on a 25% interest rate, now significantly lower at 11%. Insiders argue that the actual carrying cost should be closer to Rs1 per kg, and that the PSMA is inflating the figures to maintain higher prices.
Amid rising prices, the government is also contemplating sugar imports to address the supply shortage. A tender for 50,000 tons issued by the Trading Corporation of Pakistan (TCP) earlier this year failed to attract bids, but a new tender for 100,000 tons is now under consideration.
