ISLAMABAD: The Finance Ministry has observed that downward trend has been witnessed in inflation indicators like Consumer Price Index (CPI), Wholesale Price Index (WPI) and Sensitive Price Index (SPI) in the first week of current month.
“These trends have benefited the people by lowered prices of daily commodities and transportation fares,” a source told Customs Today, adding, “The Finance Ministry, National Price Monitoring Committee (NPMC), also review inflationary trend/prices and supply of essential commodities in its meetings on regular basis so that benefits of reduced prices of the petroleum products may be passed on masses.”
“As a result of the measures taken and being taken by the ministry, CPI inflation (Y-o-Y) in December 2014 has come down to 4.3%. A similar downward trend has also been witnessed in other inflation indicators like WPI 0.9% and SPI 0.5%,” the source said while explaining the possible benefits to public due to reduction in prices of the petroleum products both in the international market.
The source said that CPI measured Inflation rate in the country, however, its coverage was limited; only covers urban centers therefore prices may have different trend in rural and urban centers therefore rent is computed through construction input items index instead of rent survey as it measured partially inflation not total consumer’s expenditure.
“CPI measures price changes of fixed market basket of goods and services of constant quality and quantity, it tells how much cost of living has risen or fallen due to price changes irrespective of changes in consumer behaviour or quality of goods however, it does not reflect the cost of living or in house hold consumption expenditure as such but only the influence of price fluctuation on the trend,” the source added.
Similarly, the source said that SPI was computed to assess the price movement of essential commodities at short interval of time to review the price situation in the country and Sensitive Price Indicator (SPI) was designed to assess price movement of essential consumer items at short intervals (on weekly basis ).
Moreover, the source said that Wholesale Price Index (WPI) was the price of a representative basket of wholesale goods and it measured the general price level in the whole sale market and value of marketable surplus was being used for deriving weights of commodities/items included in WPI as value of marketable surplus was the value of commodity available for sale in wholesale market which was equal to the total value of production less consumption by the producers less exports (if any) plus imports.
The source said that in the international market oil prices declined and the government passed on the benefits to the people accordingly.
“In domestic market, petrol price declined from Rs 103.62 per litre in October 2014 to Rs 78.28 in January 2015 and diesel prices from Rs 107.39 per litre to Rs 86.23 per litre in January 2015 showing a decrease of 25% to 20% respectively,” the source added.
The source said that the prime minister in this regard wrote a letter to chief ministers to extend the benefits of this reduction to the people by lowering the transportation fares and the prices of commodities and the provincial governments were taking appropriate measures to monitor the prices and ensuring smooth supply of commodities so that the benefit of the reduction in petrol prices be passed on to the common people.
“The National Price Monitoring Committee (NPMC) chaired by the Finance Minister Ishaq Dar also monitors the prices and supply position of essential commodities in consultation with provincial governments and concerned federal ministries/ divisions and organizations on monthly basis,” the source observed saying that the Economic Coordination Committee (ECC) of the cabinet also reviewed inflationary trend/prices and supply of essential commodities in its meetings on regular basis.
