Hike in fuel price increases the maximum retail price of most imported commodities

Almost all grocery shops in Thimphu have seen a higher maximum retail price (MRP) of imported commodities, especially those imported from India and Thailand due to the hike in fuel prices and the consequent inflation.

Most wholesalers in Thimphu are selling the commodities at 5-10 percent increase in the MRP value, especially Dalda.

“We used to sell Dalda at Nu 2,000 per carton before, but now we are selling them at Nu 2650. In other words, the MRP for a packet of Dalda was around Nu 130 before the fuel hike, but now its MRP has climbed upto Nu 183. Almost all items in My Mart has recorded increase in the MRP value including oil, biscuits, snacks, food items, non-food items, etc. A 5 kg of Maida, which used to cost Nu 200, now costs Nu 250. Even from daldas, the vanaspati dalda is the item that has recorded the highest increase in MRP (from 2000 INR to 3500 INR),” said Jigme Penjor, the proprietor of Norbu Dechenling shopping mart located near the Centenary Farmers’ Market in Thimphu.

He also said that while the MRP of most items like biscuits increased by only around Nu 5, some items like Gold Coffee saw a drastic increase in MRP by 150 rupees per 100 gm. The MRP changes have resulted in slight decrease in sales, but that has not hampered the profit margin.

“For items imported from India, we know at what rate to sell them as there is a clear indication of the MRP on each item, but for those imported from Bangkok, the price fluctuates. And almost all items imported from India noted increase in the MRP value but for those from Bangkok recorded increase in some items while the price of other items remained the same,” said Jigme.

The price of rice and Nestle’ Everyday milk powder have not changed.

“In my shop, the MRP of most items have increased by Nu 5-10 including the oil, biscuits, Dalda, etc. We shopkeepers won’t be affected by the MRP increase at all. Instead, it is the general public and customers who will feel the effects of the MRP increase. The basic necessities, food items, etc., are needed by the customers and they will have to buy it regardless of whether the price has increased and decreased, so it has direct impact on the consumers. For us shopkeepers, we will have to sell the items according to the price at which we purchased them in order to avoid running a loss,” explained Roshan Basnet, the owner of Breedee shop in Babesa.

Similarly Rinzin, the owner of TsheRinChe Mart in Thimphu said that MRP of most of her commodities has increased compared to pre-hike in fuel prices. Tshokey, another owner of Tshokey Tshongkang in Thimphu said that she mostly imports her goods from Bangkok, and the price increase is not due to MRP but can be attributed to tax, dollar exchange rate, and transportation costs.

According to the NSB report, the year-on-year inflation rate for import goods continued to increase in third and fourth quarter of 2021 by 15.99 percent and 18.05 percent respectively. Within imported goods, the highest increase was recorded in metals and metal articles with more than 40 percent increase. Mineral products, cement and electricity also recorded an increase of 26.32 percent and 35.25 percent in July-September and October-December respectively.

Ferrous product was the main contributor for the increase in metal & metal articles while increase in fuel price led to the increase for mineral group. 2021 saw a record increase for import price index with an annual average increase of 14.03 percent from 2020 mainly driven by metal & metal articles with 24.64 percent, and mineral products, cement & electricity with 38.82 percent. Unlike the export, all groups within the import recorded an increase.

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