Despite the drop in oil prices globally this year and last year, many observers have noticed the prices of important and basic commodities in the Kingdom remain inflated.
Though the price of 13 basic commodities—such as wheat, American rice, coffee, red meat and vegetable oil— decreased worldwide the price of these items in the Kingdom remain unchanged, Al-Watan newspaper reported.
The lack of a decrease in prices has caused members of the public to wonder why the Ministry of Commerce and Industry remains silent and feel that traders are exploiting the public.
Saleh Al-Hussaini, chair of the Shoura Council's Economy and Energy Committee, recently stressed the importance of monitoring prices in the local market, which he said should reflect global prices.
These views were echoed by Dr. Abdullah Al-Harbi, a member of the Shoura Council, who accused the Ministry of Commerce and Industry of not doing its job properly. “There is a need for the setting up of an authority to keep an eye on the world prices of basic commodities in the same way things happen with gold, precious metals and petroleum,” he said.
Dr. Isa Al-Ghaith, another member of the Shoura Council, said the common person notices that the prices of commodities rise in synchrony with oil prices. “When oil prices rise above $100, the prices of commodities rise immediately. These rises are illogical. Traders say this is a result of the hike in oil prices. However, traders have goods in store from when the prices were lower which they then sell at a higher price. All this takes place without understanding the position of the Ministry of Commerce and Industry towards this matter,” he added.
Al-Ghaith said that when the price of oil rises by 10 percent, the prices of commodities double. “Sometimes the ministry keeps silent or justifies this rise in prices by saying it is due to a rise in world prices. For example, the global price of sugar has seen a drop during the recent period. However, the price has not decreased in the local market. The reason traders give us is that there is a lot of stock purchased at the old price. This is despite the fact that most sugar is produced locally and has nothing to do with the import market,” he added.
Al-Ghaith said the same applies to important commodities like rice and medicines. When the world prices increase, the local prices also increase despite the existence of stocks purchased at the old and lower prices.
“When prices of commodities increase globally, we see the effect straightaway in the local market. However, when world prices drop, it takes more time for the effect to be seen in the local market. When local prices do decrease, they do so at very low percentages and in a sluggish manner,” he said.
Al-Ghaith stressed that the Ministry of Commerce is not fulfilling its duties properly. “Oil prices have dropped to less than half. Despite this, the local price of commodities has not decreased, not even by 10 or 20 percent,” he said.
Dr. Abdullah Al-Maghlouth, a member of the Saudi Economic Association, called on the Ministry of Commerce to issue a daily bulletin in local newspapers stating the prices of key products. “This should be similar to how it happens in neighboring countries so that citizens can get acquainted with prices. The Ministry of Commerce needs to monitor the market to reassure citizens that prices are real and not inflated and that the market is normal,” he said.
“Depending on global economic conditions, prices sometimes rise and at other times drop. But what is observed in the local market is that the prices of some imported or local products are rising continuously despite their availability in the market,” he said, adding that the prices of some commodities have decreased in the world market, but are rising continuously in the Saudi market without supervision or monitoring from the Ministry of Commerce and Industry.
“Thanks to Allah, our government is wise and subsidizes some imported commodities in order to help citizens and decrease their burden,” he said. Al-Maghlouth called for a consumer protection association to monitor the market and curb inflated prices.
Ahmed Al-Hakami, another member of the Shoura Council, said the Ministry of Commerce is exerting itself and would not allow matters of this nature pass so easily. “The effect of the drop in world prices does not occur overnight, but needs time in the process of importing, processing and delivering goods to warehouses at new prices,” he said.
Al-Watan contacted Turki Al-Tu'aimi, spokesman for the Ministry of Commerce and Industry, but no response was forthcoming. An official letter including the questions was sent to the ministry but again no reply was received.
