22 september 2017

Central Asia news

Uzbekistan: From free enterprise to the Soviet distribution system

07.04.2008 12:59 msk

Staff correspondent (Tashkent)

Business Uzbekistan

The Uzbek authorities resort to the tried-and-true administrative techniques as a way of dealing with high prices. As of now, all dealers in vegetable oil are ordered to sell it 50-100% below the standing market price.

The State Committee for Demonopolization published the prices it believes vegetable oil should be sold at. According to these figures, refined non-deodorized vegetable oil should go at 1,500 sums per kilogram regardless of quality (non-packaged) and 1,900 sums per kilogram or 1,750 sums per liter (packaged). Retail price of refined deodorized vegetable oil (packaged) is not supposed to top 2,000 sums per kilogram or 1,850 sums per liter regardless of quality.

No prices above these are to be permitted. The State Committee for Demonopolization promises trouble to the obstinate dealers.

Press Service of the State Committee for Demonopolization encourages the population to report every violation of the rules. As for dealers' right to set the prices in accordance with the market situation, nobody bothers with acknowledging it.

It may be added that vegetable oil price in Uzbekistan soared sky-high last year. It went up from 1,600-1,700 sums in January to 3,700-4,700 sums in late December (a 130-160% rise). It is currently available at between 3,700 and 4,200 sums per liter.

Cotton oil is not much cheaper. It is available at 3,000 sums per liter, these days. Makhallya self-government bodies distribute it 2 bottles per capita at 1,700 sums. As a matter of fact, 1,700 sums is how much it is supposed to cost, but the locals pay 1,800 sums per liter (plus 100 sums for delivery - pr so they are told). This cheap oil is usually distributed once every month or two and nobody knows when it is going to be available again. RIA-Novosti expert Sanobar Shermatova maintains that flour and rice are also distributed at fixed prices in Uzbekistan.

Minimum wage in Uzbekistan being 20,865 sums, an average national may buy 5.5 bottles of butter or 7 bottles of cotton oil with the money.

What measures the government is taking are expected to remedy the situation. Since refined deodorized vegetable oil is to be available at 1,850 sums per liter now, an average Uzbek may buy 11 bottles of it.

That's how things are supposed to be. For the time being, however, the announcement of the fixed prices resulted in utter disappearance of cotton oil from sale. It is an infrequent dealer who will agree to sell it to customers "on the side", at the standing market price.

Uzbekistan is reverting to the system of vegetable oil distribution. Reanimation of the long since forgotten coupon system may become the next step.