Nepali consumers are distressed as even essential items, including salt, rice, lentils, edible oil, sugar and beaten rice have recently been costing them an arm and a leg. Following India’s recent ban on export of non-basmati rice, its average price increased by Rs200-Rs300 per bag. What’s more, the 40 percent increase in customs duty on sugar has rocketed the white stuff’s price to Rs105 a kg. Even edible oil has become pricey by Rs40-Rs50 per litre, and lentils are now expensive by Rs30 a kg. As people are having to pay more for food, they are having to cut down on other essentials like health and education expenses.

While the traders attribute the recent price hike to global inflationary pressures, a recent report by the National Consumer Forum, a consumer rights body, says otherwise—the surge in prices in the Nepali market is disproportionately higher compared to global increases. Additionally, the report highlighted that the increased costs of essential goods are not solely the result of disruptions in supply caused by the Covid-19 pandemic, Russia-Ukraine conflict and reduced rainfall (in the case of rice) but also due to traders trying to use such excuses to jack up prices.

It is an open secret that supply mechanisms and trade of goods in Nepal are in the grip of go-betweens, and the government’s failure in monitoring and distribution has added to the problem, opening the door for the black marketers. For instance, as the government doesn’t regulate the price of edible oil, traders sell it at inflated prices in the local market. Every time petroleum prices decrease, the Department of Transportation slashes bus fares too; however, the implementation is nonexistent as most bus operators blithely ignore the orders from above.

The government should acknowledge the severity of the problem and intervene in the market. Unscrupulous traders should not be allowed to exploit vulnerable consumers. The state should moreover fix the price of edible oil and reduce the custom duty on wheat to zero. In its latest report, the World Bank states how India’s supply shocks and import ban on wheat and rice have contributed to higher prices in Nepal. Therefore, as the consumer forum report suggests, in order to keep the traders from deceiving people, it is important to make new arrangements to import rice from India and other countries, set a selling price, and give government-owned entities the responsibility to manage supply.

First, the government must ensure transparent and affordable prices of essential goods. The inflationary storm in the country calls for robust market monitoring mechanisms, analysis of market prices, and a shift in focus from politicking to tackling the ills of the market and the overall economy. As vital is to increase domestic production to achieve self-sufficiency at least in a few crops and essential goods. Officially, the year-on-year consumer price inflation stands at 6.83 percent as of mid-June, but unofficially the rate could be much higher, and its burden on the poor and vulnerable far-reaching. Only by taking decisive action in this challenging period can the government provide some respite to desperate consumers.