In Pakistan, banaspati ghee and cooking oil are essential ingredients in nearly every household kitchen. However, recent price hikes have made these basic commodities more expensive, placing a strain on monthly household budgets. The increase in rates of ghee and cooking oil is being felt across the country, with prices rising as much as 20% in just two months, despite government claims of declining inflation.
Ghee and Cooking Oil Price Increase in December 2024
According to reports, the prices of ghee have risen by Rs30 to Rs120 per kilogram across various cities in Pakistan. Additionally, cooking oil prices have surged by Rs50 to Rs150 per litre in the same period. For instance, the retail price of A-grade ghee now ranges from Rs505 to Rs559 per kilogram, depending on the region. In Lahore and other cities, the price of popular Sufi ghee has reached as high as Rs350 per kilogram.
On the other hand, the price of B-grade ghee varies between Rs440 to Rs500 per kilogram. These price hikes are primarily attributed to an increase in the cost of raw materials in the international market, according to wholesale dealers.
Economic Outlook and Inflation in Pakistan
The latest figures released by the Pakistan Bureau of Statistics (PBS) show a decline in the country’s core inflation rate. In November 2024, core inflation, as measured by the Consumer Price Index (CPI), decreased to 4.9%, compared to 7.2% in October 2024. In contrast, inflation stood at a staggering 29.2% in the same month of 2023.
While core inflation has slowed down, the price increases in cooking oil and ghee highlight the ongoing challenges facing the consumer market in Pakistan. The prices of essential commodities like ghee and cooking oil are critical factors influencing overall inflation, especially for lower-income households that spend a significant portion of their income on food.
Impact on Household Budgets
For ordinary households in Pakistan, the price surge in ghee and cooking oil is likely to have a significant impact on monthly expenses. With prices rising steadily, families will need to adjust their budgets to accommodate the higher costs of these everyday essentials.
Though inflation has slowed compared to the same time last year, price hikes in key food items like ghee and cooking oil underscore the volatile nature of essential commodity prices in Pakistan. It remains to be seen whether the government’s efforts to combat inflation will lead to a stabilization of prices in the coming months.
Why the Price Hike Matters
The recent increase in prices of banaspati ghee and cooking oil is part of a broader trend affecting the food industry in Pakistan. With the global rise in raw material costs, products like ghee and cooking oil, which are used in almost every meal, have become significantly more expensive. This places a heavy burden on households already struggling with the higher cost of living.
The government’s claims of decreasing inflation contrast sharply with the reality faced by consumers, who are seeing prices for essential items rising, rather than falling. For now, Pakistani families are left to cope with the financial pressure of escalating food prices, while inflation remains a key issue for policymakers.
