The Monopoly Control Authority (MCA) has failed to issue show-cause notices within stipulated time to the sugar mill owners, who were part of the cartel fleecing the buyers by fixing sugar prices at its own. Sources told Business Recorder on Wednesday that on the direction of Prime Minister Shaukat Aziz, the MCA conducted study of the market which confirmed that sugar millers have formed a cartel to manipulate the market situation to get irrationally high profit.
Talking to this correspondent, an official said "We have conducted the study and reached to the conclusion that sugar mill owners have formed a cartel to fix prices at their own, and on the same basis suggested punitive action against those who were part of the cartel."
It may be noted that the prime minister directed the MCA some time back to look into the reason of high prices of sugar in the market and take action against those who were getting undue profit on sugar sale.
The MCA took the directive in letter and spirit and sought data from the sugar mill owners to verify their stocks. This was followed by a study to determine the cause of high sugar prices from December 2004.
It may be recalled that sugar prices were reasonable up to December 24 last year but the situation changed overnight and the prices suddenly went from Rs 23 to Rs 28 per kg.
This unexpected increase of Rs 5 per kg received harsh reaction from the government. It took a number of decisions to bring the prices down to some reasonable level such as import of sugar at zero-rated duty and release of buffer stock through the Utility Store Corporation, but none worked to government's expectations and even today sugar rates are much higher in the open market.
The policymakers made desperate effort to tighten nose against those mill owners who were exploiting the market to get undue profit on their stocks by moving the MCA against them, but its yet to be materialised.
The sources said as per rules, within 15 days of establishing formation of a cartel, the MCA was required to issue show cause notice to the guilty mill owners to take the process to the logical conclusion but it did not happen.
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