Price controls done away with, levy of Rs. 65 per kg on imported rice reduced to 25 cents

By Shamindra Ferdinando

The government has allowed emergency regulations imposed several weeks ago to ensure an uniterrupted supply of essential commodities such as rice, sugar and other consumer goods, to lapse. As a result the post of Commissioner General of Essential Services held by Maj. Gen. M. D. S. P Niwunhella has been abolished.

President Gotabaya Rajapaksa promulgated emergency laws after having named serving officer Niwunhella, the head of his security as the Commissioner General of Essential Services. The President’s Office made the announcement as regards Maj. Gen. Niwunhella’s appointment on August 30, 2021.

As per the powers vested in terms of the section 2 of the Public Security Ordinance, President Rajapaksa declared emergency regulations formulated as per the section 5 on essential food supply, with effect from midnight August 30, 2021.

The declaration of emergency regulations triggered protests from the Opposition with the Tamil National Alliance (TNA) warning the move could lead to a state of repression. The civil society, too, protested against the move.

Authoritative sources told The Island that with the change of government strategy in respect of price controls, the ruling Sri Lanka Podujana Peramuna (SLPP) had refrained from seeking parliamentary approval required to extend emergency regulations. The Parliament on Sept. 06 passed emergency regulations that authorized Maj. Gen. Niwunhella to seize food stocks, confiscate warehouses and vehicles used to transport such items.

Emergency regulations were passed by 81 majority votes with 132 lawmakers voting for and 51 against in the 225-member legislature where the SLPP enjoys a near two-thirds majority.

Sources explained that the original strategy had been for the newly appointed Commissioner General of Essential Services and Chairman of the Consumer Affairs Authority (CAA) retired Maj. Gen. Shantha Dissanayake, to work in close coordination to seize hoarded food stocks.

Against the backdrop of ceasing of emergency regulations meant to prevent hoarding and the termination of the Office of Commissioner General of Essential Services, the government yesterday (4) removed the retail price cap on several essential commodities through a gazette notification. The retail prices of dhal, sugar, sprats, green gram, potatoes, big onions, canned fish, chickpeas, wheat flour, full cream milk powder, dried fish, coconut, chicken and maize have been removed with immediate effect.

The new gazette notification has also removed the maximum price limit of Rs. 1,500 for a 400g packet of sausages and Rs. 1,500 for a kg of mackerel. In addition to that the Special Commodity Levy of Rs.65 per kg of imported rice has been reduced to 25 cents for the next six months.

Finance Minister Basil Rajapaksa has made these tax deductions with effect from November 2 in accordance with the powers vested in him under the Special Commodity Levy Act.

The duty on imported sugar, too, remains 25 cents a kilo since Oct 13, 2020 when the Finance Ministry slashed Rs 50 duty on a kilo of sugar.

The government brought in emergency regulations close on the heels of a spate of raids on warehouses from where authorities took 29,000 metric tonnes of sugar into custody. Having repeatedly vowed to maintain prices, the government recently allowed sharp increase of milk powder and liquefied petroleum gas. Interestingly, local producers also matched the increase in the price of imported milk powder.

Trade Ministry sources yesterday told The Island that price controls had been done away with as part of a new scheme to allow the market to decide prices. However, the government would make necessary interventions to prevent the importers from exploiting the consumers, sources said, adding that the second consignment of Nadu from India would arrive at the Colombo harbour today (5).

Since the cabinet recently authorized the importation of 100,000 metric tonnes of rice to meet the shortfall, the Trade Ministry imported 15,000 metric tonnes of Nadu from India. With the arrival of the latest stock, the total amount of Nadu imported from India would be 22,000 metric tonnes. According to the Trade Ministry, they are planning to procure about 40,000 metric tonnes of rice from India, Pakistan and Myanmar.