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… OCP warns businesses against inflating prices 

YK Poudel

Despite the recent measures, many residents complain that after the pandemic, goods and services prices have been soaring, forcing them to compromise on their consumption.

The enactment of the Tax Act of Bhutan, 2022 last month, sales tax and customs duty of close to 142 goods have been reduced. Taxes were reduced with the aim of easing inflationary pressure in the market.

The Office of Consumer Protection (OCP) on December 28, issued a public notification saying that as a result of the legislation, market prices of different types of cereals, pulses, cooking oil, milk powder, agricultural spare parts, and seeds are expected to decrease correspondingly.

A resident of Thimphu, Sangay Dema said that the cost of basic consumer products has hiked over time. “The consumers in countries like Bhutan, where the major essential products are imported, face the problem of high prices.”

She said that the products, which are in shortage, would gradually have higher prices over time. “Majority of the residents do not complain regarding the price hike because they don’t know where to complain,” she said.

Probin Ghalley, a corporate employee, said that the situation could possibly be due to the prolonged global pandemic and the war between Russia and Ukraine, which broke the major supply chain.



“Although a notice has been passed the price has increased already all over the country. This would mean no decrease in the price,” he said.

“Russia and Ukraine are among the world’s net exporters of agricultural produce. The war has affected the overall trade all over the world because of an increase in the fuel price leading to transportation charges,” he said.

The increase in prices of various goods and services has led to lesser choice and preference for the purchase of goods for many families.

Sonam Dorji, a resident in Thimphu said that the increase in the prices of goods has led to the lesser purchase of goods and services. “After the rapid hike in the price of goods, I purchase only the essential goods at the cost of other commodities,” he said.

On average, the rate of goods such as eggs per tray has hiked the highest from Nu 250 to Nu 380, Horlicks to Nu 275 from Nu 240, and baby diapers to Nu 100 from Nu 70, among others.



Shopkeepers said that transport cost remains one of the main drivers of inflation.

The prices of goods and services as measured by the Consumer Price Index (CPI) increased by 4.89 percent in October 2022 compared to the price of October last year. Non-food products with 6.63 percent increase were the main contributor to the overall inflation with 72 percent contribution to the overall increase. Food prices increased by 2.87 percent in the past 12 months.

The purchasing power of Ngultrum as measured by CPI is Nu 60 as of October 2022 compared to December 2012.

Even after the consumer protection office issued the notification, residents said that the prices of goods and services have not changed.

The OCP asked businesses to refrain from unjustifiably inflating prices. The office called on the consumers to report to the OCP in the event of any unethical business practices. A total of 200 complaints were registered between 2021 and 2022.



The business entities found violating consumer protection rules or engaging in unfair trade practices were directed to either rectify or were fined as per the Consumer Protection Act of Bhutan 2012.

Altogether, Nu 0.24 million were imposed as fines from 40 business entities; while a total of Nu 1.96 million was refunded to aggrieved consumers from as many as 39 business entities.

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