The Killid Group, November 17, 2013

Fuel prices rise as mercury falls

Consumers are feeling the pinch of the rivalry between the Association of Oil Importers and the Ghazanfar Group

By Mohammad Reza Gulkohi

Traders and importers have combined to hike the price of cooking gas and other fuel for heating as winter begins to bite.

Consumers are feeling the pinch of the rivalry between the Association of Oil Importers and the Ghazanfar Group. Corruption at the customs on the border, a hike in taxes and the blocking of Ghazanfar refinery has sent fuel prices zooming.

For the poor the situation is getting from bad to worse. Mir, a daily wage worker, says his family eats one meal a day, if at all. He is the only earning member in the family, but he has not found work for the past 13 days. "Every morning I stand in the square hoping someone will hire me," he says.

Mir already owes the local moneylender 1,260 Afs (1 USD is roughly 57 Afs). He says his neighbours help, and local shopkeepers sometimes give food. Sabera, his wife, who is nursing a child with high fever, weeps because she has nothing nutritious like meat to give him.

As winter sets in rising demand for cooking and heating fuel has sent prices of cooking gas, wood and coal rising. It has nothing to do with the market. The government, which neglected to take action, had announced it was buying oil from Russia butnothing further has been heard.

Winters in Kabul has made life harder for the poor people.
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Deputy Minister for Commerce and Industries Muzamil Shinwarai said one million tonne of diesel and petrol would be procured from Russia to stabilise fuel prices. The deputy minister was meant to travel to Russia to sign the agreement.

Shinwari had told Sadaye Russia (voice of Russia radio station) fuel prices were going up daily. He said the government was considering the possibility of a long-term purchasing memorandum of understanding (MoU). Already a MoU for petrol and diesel has been finalised.

The deputy minister spoke with great sympathy about the problems faced by traders at the border between Afghanistan and Uzbekistan. He assured Killid the "technical problems" that were affecting traders had been partly solved. Soon the two countries would ink a transit treaty.

The government shut down the Ghazanfar plant sending oil prices skyrocketing. The allegation was that it was adulterating the oil.

Supply vs Demand

ButIsmail Ghazanfar, head of the company, says, "It is not known why our oil refining plant was blocked. The government should respond!" He observed the spurt in prices was directly linked to the shortage of oil in the market because of the Ghazanfar plant's closure.

Azerakhsh Hafezi, in-charge of International Relations at the Afghanistan Chamber of Commerce & Industries, defends the decision to close the refining plant. "The Ghazanfar company was importing poor quality crude which has health implications. It also created problems for other companies." Hafezi was hopeful the plant would solve the complaints, and soon restart.

Ghazanfar has a monopoly on the oil market. In August, 21 small importers of the Association of Oil Importers accused the group of unfair trade practices. Now they are cashing in on the shortage by selling oil stocks at a higher rate.

Integrity Watch has mentioned the corruption at border checkpoints and the highway. Trucks are stopped, and money is taken for safe passage.

In December 2011, cooking gas prices in Kabul kept spiraling upwards after Eid.(Killid 495, Cooking gas costly this winter'). While government gas stores were selling gas at 50 Afs a kg, gas sellers in Maiwand lane were selling at 85 Afs, and in Kart-e-Naw it was between 90 and 100 Afs.Calm was restored only after intervention by the Ministry of Trade.

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