The Cabinet on Sunday formed a task force to investigate the sudden rise in the price of sugar at the start of the festival season following sharp criticism from lawmakers and the public.

On September 16, the government imposed import quotas on sugar as domestic mills were complaining that they were being priced out of the market by cheaper imports. Immediately after the quantitative restriction, the price of sugar jumped 42 percent.

Since then, the government and lawmakers of various parliamentary committees have been arguing over the price hike. Lawmakers criticised the government for raising the price of the essential product on the eve of the festive season while government officials defended their move saying they were protecting local mills who have 108,000 tonnes of unsold stocks.

The Cabinet formed a seven-member probe panel led by Dil Bahadur Gurung, a member of the National Planning Commission responsible for the agriculture sector. The other members are joint secretaries from the Industry, Commerce and Supplies and Agriculture and Livestock Development ministries, and representatives of sugar mills, sugarcane farmers and consumer rights activists.

Multiple sources said that the task force was formed after a heated debate between Minister for Industry, Commerce and Supplies Matrika Prasad Yadav and members of the parliamentary Public Accounts Committee (PAC).

The dispute arose after the PAC directed the government to cap the price of sugar at Rs63 per kg last Wednesday. The ministry disregarded the instruction and fixed the price at Rs70 per kg last Friday. Sugar costs Rs49 to Rs90 per kg in the local market.

On Friday, Yadav held a press meet and criticised lawmakers for telling the ministry to fix the price of sugar saying that it was not their responsibility to dictate the market price. He even challenged the parliamentary committee to fix the price of other essentials if they could.

The PAC has also formed a five-member sub-committee under the coordination of lawmaker Lekha Raj Bhatta to investigate the recent spike in the price of sugar. Lawmakers Parbata Chaudhary, Pradeep Yadav, Prem Ale and Chanda Chaudhary are the other members of the panel.

Last year, the government doubled the customs duty on sugar to 30 percent but this failed to please sugar producers.

The Cabinet approved an import quota of 100,000 tonnes annually as domestic mill owners have been complaining about unsold sugar piling up in their warehouses owing to cheaper foreign products.

Sugar is one of the fastest selling items during festivals. According to the ministry, demand for sugar during the month-long festival season encompassing Dashain, Tihar and Chhath soars to 30,000 tonnes from the usual monthly consumption of 8,000 tonnes.