The government has increased the prices of wheat flour, sugar and ghee by 25 percent to 62 percent for sale through the Utility Stores Corporation (USC) with immediate effect to reduce the impact of untargeted subsidies.

The beneficiaries of the Benazir Income Support Programme (BISP) would be exempt from the price hike, while the limit for subsidised purchases from the USC has also been curtailed.

The new rates were notified by the USC on New Year’s Eve on Saturday after the federal cabinet last week approved Finance Minister Ishaq Dar’s recommendation to clear a hybrid model of subsidies involving targeted and untargeted elements of the prime minister’s relief package.

Under the new rates that went effective on Sunday, the price of sugar has been raised from Rs70 per kg to Rs89, an increase of 27pc. Likewise, the price of ghee has been jacked up by Rs75 per kg to Rs375, while wheat flour price has been increased by 62pc to Rs64.8 per kg from Rs40 at present.

The USC said in a statement that poor populations registered in the BISP’s scorecard and below PMT-32 (Proxy Means Test to describe people below the poverty line) would remain eligible for a special, targeted subsidy.

They would continue getting wheat flour at Rs400 per 10kg bag, ghee at Rs300 per kg and sugar at Rs70 per kg. They would also get a Rs15-20 per kg discount on pulses and rice.

However, their monthly purchasing limits have been capped to avoid the misuse of subsidies. Therefore, BISP beneficiaries under PMT-32 would be allowed to purchase a maximum of 40kg of wheat flour, 5kg of sugar and 5kg of ghee per month.

All other USC customers would now be provided wheat flour at Rs648 per 10kg bag, and ghee and sugar at Rs375 and Rs89 per kg, respectively.

There would also be a limit on the monthly purchases of these customers and they would not be allowed to avail more than 20kg of flour and Rs3kg each for sugar and ghee per month.

The people of this category were earlier eligible for 40kg of flour and 5kg each for ghee and sugar. The USC said this category would also be able to get a Rs15-20 discount on pulses and rice.

The USC said that on the premier’s directives, the people of Khyber Pakhtunkhwa would be provided wheat flour at Rs400 per 10kg bag through designated sales points and mobile utility stores.

The customers of USC would be required to secure their monthly purchase eligibility before visiting the store through an SMS on 5566 so that they are provided with a one-time password and national identity card confirmation to avail the USC’s subsidy. They would be able to contact any USC outlet of their choice and avail subsidised items by showing OTPs.

The USC said the new system had been put in place to ensure a transparent supply of subsidised essential commodities (flour, ghee, sugar, pulses and rice) and facilitate the deserving poor people and avoid waste of subsidy. It said that national identity cards and OTPs would not be required for the customers to purchase commodities other than subsidised items.

The new system, the USC said, would help subsidies reach the targeted families through modern digital means, improve performance and make the entire system transparent. The USC currently provides its services to more than 15 million customers through over 4,000 outlets and 1,000 franchises across the country.

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