Governments Can Decrease Prices By 10 To 20 %

The government can reduce food, consumer, and construction prices in the country by 10 to 20% through a variety of measures, according to a reliable source. These include working to reduce or temporarily waive customs duties charged by the General Administration of Customs; eliminating handling fees, flooring fees, and other fees imposed on major importers of basic materials and local manufacturers; and providing storage facilities for local companies and importers, particularly in the construction sector.

According to a local Arabic daily, the Council of Ministers examined this suggestion following what was submitted by the Ministry of Commerce and Industry through an advisory committee linked with the Minister's office, but it did not see the light of day.

Furthermore, the daily has learned that 95 percent of the cases of seizures (artificially raising prices) recorded by the Ministry of Commerce and Industry in the last two years, were filed against companies, suppliers, or commercial stores and referred to the Public Prosecution, has reportedly resulted in the suspects being declared innocent.

According to informed sources, the defendants, whether they were food, consumer, or construction materials merchants, most of them proved to the investigation authorities that their price increases were based on economic feasibility, as failing to do so would result in significant financial losses, citing two main reasons for raising the prices of their products and goods:

1 - Price increases in the place of origin, whether in terms of entirely imported goods or raw materials used in manufacturing.

2 – The high cost of shipping, which has increased significantly in the last two years, sometimes by as much as 200 percent, over prices prior to the start of the Corona epidemic.

According to the sources, one of the reasons for the rise in commodity prices in Kuwait is due to a number of factors, including the fact that most companies pay customs duties, the high cost of storage, particularly because the price of a refrigerated rental metre ranges between 7 and 8 dinars, and the scarcity of storage spaces, particularly air-conditioned storage spaces, which is incompatible with the nature of the local market, which imports 95 percent of its consumer products.

She noted that a large number of local companies suffered from the scarcity of stores during the Corona crisis, as they had no trouble securing strategic stock for the goods they were importing but had trouble finding additional storage spaces to increase their storage levels for goods for more months, forcing them to turn to government agencies for help.

The sources emphasized the necessity for the government to speed up the process of releasing lands for storage, citing the benefits of doing so in putting out a portion of the pricing fire that commodities are facing in Kuwait, as well as the following seven outcomes:

1- Assisting businesses and importers with storage issues and increasing strategic stock for longer periods of time.

2 – Understanding Kuwait's strategic store of goods, appraising their pricing, and preventing any fake price increases before and after emergencies, like the Corona pandemic and the Russia-Ukraine war.

3 – Resolving municipal infractions in investment buildings, which are now crammed with erroneous warehouses.

4 – Reducing the number of fires in investment areas caused by haphazard storage operations that lack security and safety measures.

5 – Taking advantage of some huge idle state properties and converting them into revenue-generating areas for the state treasury by charging rental fees.

6 – The development of public joint-stock firms for storage has become a pressing concern, as it helps citizens, as citizens have been invited to subscribe to them and own their shares, especially since the activity is highly profitable, and thus the dividends will be gratifying.

7 – Providing storage sites in various Kuwaiti governorates in compliance with top international storage standards, which helps to improve Kuwait's business environment by streamlining supply chain activities.

Comments Post Comment

Leave a Comment

Submit