Are cigarette prices in Pakistan among the lowest?
Expert calls for efforts to reduce demand for illicit cigarettes
Illicit cigarettes are easily available and openly sold across Pakistan at prices as low as Rs15 per pack. PHOTO: REUTERS
LAHORE:
For many, the widespread perception is that cigarette prices in Pakistan are 'among the lowest' in the region.
However, the Price Relative to Income (PRI) index, which makes comparison among 22 countries, shows that Pakistan's PRI is the second highest at 3.82% after India's 4.52%. Countries like China and Japan have 0.4% and 0.52% PRI respectively.
Working group recommends increasing duties on cigarette packs
Simply put, the PRI denotes the extent of proportionality between the price of a commodity and the income of any consumer(s). This indicates that the price affordability level differs from country to country depending on the per capita income and, in simple terms, purchasing power.
"When comparing prices among countries, using absolute numbers is ridiculous and misleading. Prices are only relative to income and affordability. Similarly, in the case of cigarettes, a similar comparison needs to be made, which will reflect that cigarettes are not the most affordable in Pakistan," an expert commented.
According to him, practical efforts need to be made to ensure that demand for illegal cigarettes is reduced. "This demand can be curtailed by introducing policy measures that reduce the widening price gap between legitimate and illicit cigarette brands."
While illicit cigarettes are easily available and openly sold across Pakistan at prices as low as Rs15 per pack, the average price of legitimate cigarettes exceeds Rs70.
Over 20% smokers consume smuggled cigarettes
The pressure from the WHO’s Frame Convention on Tobacco Control to increase prices of legal cigarettes, with the imposition of high taxes, in utter disregard of the prevailing scenario, has also put the survival of Pakistan's legal tobacco trade at stake. "This approach of increasing tobacco taxes to reduce smoking has miserably failed to yield workable results," the expert said.
Published in The Express Tribune, May 20th, 2017.
For many, the widespread perception is that cigarette prices in Pakistan are 'among the lowest' in the region.
However, the Price Relative to Income (PRI) index, which makes comparison among 22 countries, shows that Pakistan's PRI is the second highest at 3.82% after India's 4.52%. Countries like China and Japan have 0.4% and 0.52% PRI respectively.
Working group recommends increasing duties on cigarette packs
Simply put, the PRI denotes the extent of proportionality between the price of a commodity and the income of any consumer(s). This indicates that the price affordability level differs from country to country depending on the per capita income and, in simple terms, purchasing power.
"When comparing prices among countries, using absolute numbers is ridiculous and misleading. Prices are only relative to income and affordability. Similarly, in the case of cigarettes, a similar comparison needs to be made, which will reflect that cigarettes are not the most affordable in Pakistan," an expert commented.
According to him, practical efforts need to be made to ensure that demand for illegal cigarettes is reduced. "This demand can be curtailed by introducing policy measures that reduce the widening price gap between legitimate and illicit cigarette brands."
While illicit cigarettes are easily available and openly sold across Pakistan at prices as low as Rs15 per pack, the average price of legitimate cigarettes exceeds Rs70.
Over 20% smokers consume smuggled cigarettes
The pressure from the WHO’s Frame Convention on Tobacco Control to increase prices of legal cigarettes, with the imposition of high taxes, in utter disregard of the prevailing scenario, has also put the survival of Pakistan's legal tobacco trade at stake. "This approach of increasing tobacco taxes to reduce smoking has miserably failed to yield workable results," the expert said.
Published in The Express Tribune, May 20th, 2017.