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Ministers say they have no right to fix gas prices

Ministers say they have no right to fix gas prices

Nov 22, 2011 - 19:30

KABULinfo-icon (PANinfo-icon): Ministers of economy and finance on Tuesday acknowledged they had no authority to control gas prices, but hoped efforts underway in this regard would yield positive results.

Gas prices shot up from 55 afghanis ($1.13) to 80 and 100afs per kilogram in capital Kabul after the Eidul Adha festival, worrying residents. The current price of a kilogram of gas is about 70afs.

The Ministry of Commerce and Industries had earlier fixed the rate of one kilogram of gas at 55afs, but dealers defied the decision.

A delegation from Kabul, accompanied by Balkh officials, on Monday visited the Hairatan port to discuss the issue with gas importers. Despite a shortage at the port, traders were asked to supply available stocks to local markets.

Officials concerned promised lowering the gas rate to 55afs a kilogram within two days, saying an agreement had been signed with three major import companies.

Traders had also promised to reduce the price of one tonne of gas from $1,280 to 920.

The Wolesi Jirgainfo-icon -- lower house of Parliament -- on Tuesday summoned both the ministers to brief lawmakers on the soaring rates. Finance Minister Hazrat Omar Zakhilwal citied several reasons behind the hike.

He linked the increase to taxes, hike in prices in the international market, manipulation by Afghan traders, a negative competition among traders, transit problems, monopoly and hoarding.

Zakhilwal said his ministry could only help on tax-related issues but had no right to fix prices. However, he explained taxes had no considerable role in increased rates, because a tax of only 1.2afs was levied on a kilogram of gas.

Zakhilwal said the government had reduced the tax on the import of gas, but still there had been no cut in its price.

Speaking on the occasion, Economy Minister Abdul Hadi Arghandiwal said some traders and companies were involved in manipulating prices. He called for a law to prevent traders creating an artificial shortage and a hike in prices.

Arghandiwal said the free-market had not been suitable for Afghanistaninfo-icon.

Ahadi said the Cabinet had decided to intervene in controlling prices of some commodities. He added continuously monitoring the market, increased fuel imports by the government, signing agreements with other countries in this regard and extraction of fuel at home could resolve the crisis.

The session ended on an inconclusive note, with some MPs asking the ministers to expose the traders involved in unwanted practices, such as hoarding and monopoly.



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