Price hikes : CAP urges for stronger commitment from Government

The President of the Consumer Advocacy Platform, Mosadeq Sahebdin, comments below on the rise of prices affecting consumers in Mauritius following the domino effect of the rise in the price of fuel; his views on Metro Express and how far consumers feel they are protected by the authorities.

Price Increase

‘Consumer satisfaction is not limited to prices; it also concerns consumer welfare and protection guaranteed by a modern legal framework in line with current international developments.

Following the recent increases in the prices of mogas and diesel, the Consumer Advocacy Platform (CAP) urges for transparency in the calculation of the prices. CAP supports the other consumer association, ACIM in its demand for these calculations to be publicised. Furthermore, CAP states that it is unacceptable that consumers should bear the brunt of miscalculations by the STC last February. The consumer watchdog hence urges that the calculations be made public.

It should be recalled that the price of mogas and diesel have been increased to Rs 44.90 and Rs 35.35 respectively last Saturday.

It has been alleged that the price increase became inevitable to compensate for losses incurred by the STC following miscalculations in February. CAP rejects these explanations which it finds unreasonable, so much so the price of fuel has remained stable on the world market.  

According to CAP president, Mosadeq Sahebdin, if the errors in previous calculations are imputed to the STC or to the Petroleum Pricing Committee, it is unacceptable that consumers should bear the costs. CAP claims that STC has thus declared its incompetence. Furthermore, CAP sustains that it is incredible that the levy formerly transferred to the Maurice Ile Durable is still present in the price structure although the said MID has long been abandoned.

Impact on consumer goods

CAP fears that the increase in fuel products is already impacting on school buses as owners have already announced an increase in fares for next January. In the meantime, the new fuel prices will have an impact on consumer goods.  Transportation costs will impact on prices of goods.

CAP views that bakers’ claim for an increase in the price of bread is a provocation. Mosadeq Sahebdin recalls that, following the decrease in the price of flour as a budgetary measure, bakers never decreased the price of unscheduled bread. So-called fancy breads, supposedly enriched with butter or sesame seeds, are sold at the same high prices, enabling bakers to amass larger profits. Furthermore, as underlined by ACIM, bakers never decreased their prices when fuel suffered two consecutive decreases in prices. According to information gathered from official sources, CAP avers that the recent increase in diesel will not have any significant impact on the production cost of bread.

However CAP fears that the prices of fancy bread may increase soon. The consumer watchdog regrets that consumers rarely exercise their power to boycott products sold at exorbitant prices.

With respect to water tariffs, the Consumer Advocacy Platform views the statement of the Deputy Prime minister and minister of Public Utilities relevant to the indexation of water tariffs to the cost of living as an attempt to conceal a massive increase coming soon. It is no more than a strategy to lead consumers to accept a massive increase easier. 

CAP’s stand is based on the fact that the cost of living has not suffered important increase for the past years. An increase in water tariffs, in such circumstances is not expected to impact significantly on consumers’ pockets. Nevertheless, CAP believes that the proposed indexation would not be implemented before the next massive increase that the CWA will impose soon and for which public opinion is being prepared. Following the incredible announcement of a price increase of 50 cents per day per capita, informed sources foresee an increase of 62% in January followed by an annual increase of 5%.

CAP deplores that the CWA wants to implement a tariff increase without the approval of the Utility Regulatory Authority. CAP recalls that under section 6, paragraph (1) (d), the URA has the power to “regulate tariffs and other charges levied by a licensee …”.  This clause enables consumers and consumer unions to contest tariff increases.

Many are raising their voices against the Metro Express project…

As for the Metro Express project, CAP deems that, now that the contract has been signed, consumer groups, trade unions and other stakeholders should look forward for measures that would facilitate the implementation of the project with the least impact on consumers and bus industry employees. Systematic opposition should not be exercised to oppose all development projects.  CAP is in favour of a national surveillance exercised by citizens during the implementation of the project.

Need for a National Consumer Commission

With regards to consumer protection, the Consumer Advocacy Platform advocates for the setting up of a National Consumer Commission which would act in an independent manner. This proposal is in line with the newly reviewed UN Guidelines on Consumer Protection. CAP underlines that, following recent discussions at international level, the consumer movement has now moved from consumer rights to consumer protection. Henceforth, pending new discussions, a Consumer Protection Week will be observed with the support of the UNCTAD during the second week of March. Consumers International has given its approval to this proposal, while maintaining that the World Consumer Rights Day will be observed on the 15th of March.

The Consumer Advocacy Platform (CAP) sustains that the Consumer Affairs Unit will become obsolete in a very near future because it will be unable to cope with new developments in the concept of consumer protection on the international level. We cannot rely on a structure which has not evolved since its inception in the 70’s, CAP president Mosadeq Sahebdin told this paper.

CAP also underlines that this year, prior to the intergovernmental expert meeting on competition, UNCTAD held a one-day intergovernmental expert meeting on consumer protection.  This event heralds new commitments from member-states in favour of consumer protection.

With regard to these developments, CAP avers that the Consumer Affairs Unit will become obsolete. The main weakness of the CAU resides in its inability to cause consumer rights to be upheld outside the purview of the Consumer Protection Act. In a different line of thought, CAP avers that the ICTA, for example, is unable to enhance consumer rights in the information and communications sector, in the absence of a National Consumer Policy formulated along the UN Guidelines for Consumer Protection. 

This is why CAP advocates for a National Consumer Commission on the same model as the Competition Commission, which would operate within a new legal framework enabling it to inquire into alleged cases of violation of consumer rights, administer corrective measures and impose financial penalties.

To this end, CAP president, Mosadeq Sahebdin urges Government to ratify the UN Guidelines on Consumer Protection and to initiate national consultations in view of the formulation and adoption of a National Consumer Policy.