Commerce ministry forms panel to review commodity pricing formula

The commerce ministry today formed a six-member committee to review the existing formula, which the government has been following since 2011 to fix the prices of basic commodities.

The committee will submit the review report on the formula in a month, AHM Shafiquzzaman, head of the panel and additional secretary to the commerce ministry, told The Daily Star.

He spoke after a workshop on the price fixing formula at the commerce ministry in Dhaka.

"There are some grey areas in the price fixing formula as it was made more than a decade ago. We have a lot of room to work on to improve the price fixing formula of some selected basic commodities."

"Our target is to reduce the prices of some basic commodities like edible oil and sugar by reviewing the formula," he also said.

Experts like professors of the University of Dhaka, Bangladesh University of Engineering and Technology, the Federation of Bangladesh Chambers of Commerce and Industry, refiners, millers, importers and stakeholders concerned attended the workshop.

To set a commodity's price, the current price fixing method takes into consideration a number of elements, including processing and import costs, tariff, bottling, losses during refining, port charge and transport costs.

For instance, the current method considers 4.5 per cent as the refining loss and this element has a room for reviewing as the technologies of refining improved a lot and the quantity of losses during the refining also lowered, Shafiquzzaman also said.

Similarly, there are few more areas where the review may help in reducing the prices of edible oil and sugar in the local markets, the additional secretary also said, adding that the committee will mainly analyse those small areas to form a new price fixing method.

Commerce Secretary Tapan Kanti Ghosh said new formula may help in fixing the exact price of basic commodities as the committee will review and analyse the data.

"We need to revisit the old formula as the time and situation has changed a lot over the years," said Ghosh, who also attended the workshop.