ISLAMABAD, Nov 20: The government is considering a proposal to allow the Utility Stores Corporation to enter into the business of wholesale and bulk distribution to work as a real price stabiliser and deterrent to profiteering, hoarding and black market by the private sector, it is learnt.

Under the planned expansion programme, the corporation will establish 16 warehouses/distribution centres throughout the country. In the first phase, 314 new stores will be opened at various district/tehsil/taluka and the remaining 125 stores will be set up in major cities/stations in the second phase for which the government will provide Rs812 million.

The weak demand and supply situation is causing price increases and the poor continue to suffer despite government's interventions through various policy measures.

Sources at the ministries of finance and industries and production told Dawn on Monday that the weak demand and supply situation for essential/kitchen items needed to be improved through more policy interventions and by ensuring uninterrupted import of various required items.

The USC, the sources said, would have to penetrate in the market and increase its share to the market forces that were mainly governed by wholesalers, distributors and stockists who resort to hoarding and marketing by taking advantage of imbalance between supply and demand.

Estimates suggest that the USC could control 30 per cent of the total market share at least for 10 items -- atta, sugar, pulses, rice, vegetable ghee and cooking oil, washing soaps, fresh and powdered milk, redchillies and spices and tea.

The corporation has been advised to upgrade its infrastructure/services/stores/warehouses/facilities, management capabilities -- professional manpower, experienced and trained in retail chair stores management, regular training of officers and sales staff to upgrade their efficiency in management and sales as compared to the private sector.

The procurement of essential commodities like black gram, pulses and rice is being made in bulk at the time of harvesting in order to secure maximum rebate/discount and the same time to procure best quality commodities. Atta is being procured from the mills and sold at Rs12 per kg throughout the country as fixed by the government. Similarly, sugar is being lifted by the Trading Corporation of Pakistan and sold at Rs25 per kg as fixed by the Economic Coordination Committee of the cabinet.