The Parliamentary Public Accounts Committee (PAC) on Thursday directed the government to cap the price of sugar at Rs63 per kg in the wake of a price controversy.

This directive is aimed at preventing the price of the sweetener from skyrocketing during the Dashain, Tihar and Chhat festivals.

The committee said that they have taken the decision as per the agreement made between the government and private sugar mills on September 16. Both parties had agreed to sell sugar at Rs63 per kg excluding VAT.

Based on the private sector’s promise that they would not raise the price of sugar, the government imposed imports restriction on sugar last month.

But sugar traders and producers did not fulfill their promise after the restriction was imposed. The price of sugar has jumped dramatically to Rs90 per kg in the local market, up Rs25 per kg over the last few weeks. On Thursday, the PAC also formed a five-member sub-committee under the coordination of Lekha Raj Bhatta to investigate the recent spike in the price of sugar. Lawmakers Parbata Chaudhary, Pradeep Yadav, Prem Ale and Chanda Chaudhary are on the task force as well.

The sub-committee has been given a week to submit the report.Following the government restriction, Salt Trading Corporation (STC), the government authority mandated to maintain sugar supply in the domestic market has been unable to sell over 2,400 tonnes of sugar imported from India. The sugar imported by STC has been stranded at the Dry Port in Sirsiya, Birgunj as the authority did not issue permission to release the sugar.

Earlier on Wednesday, the Ministry of Industry, Commerce and Supplies had also capped the price of sugar at Rs70 per kg. It has issued notice that traders who sell sugar above the government set price would face action.

Last year, the government doubled customs duty on sugar to 30 percent as demanded by private sugar producers which failed to please sugar producers. The Cabinet approved a quota of 100,000 tonnes annually as domestic mill owners have been complaining about unsold sugar piling up in their warehouses owing to cheaper foreign products.

Sugar is one of the fastest selling and in-demand items during festivals. According to the Ministry, the demand for sugar during the month-long festivals of Dashain, Tihar and Chhat soars to 30,000 tonnes from the normal monthly consumption of 8,000 tonnes.