Postal Service to increase stamp prices

The price of mail stamps in the United States will rise by 3 cent on Jan. 23, the largest rate increase in 11 years.

The increase to 49 cents will be in effect for two years, The Postal Regulatory Commission, which oversees the US Postal Service, announced Tuesday.

The Postal Service has been suffering serious financial problems since the economic downturn in the country. The Agency had asked for a permanent price increase but the petition was rejected by the commission which said the $2.8 billion infusion should compensate only for the recession, not offset losses caused by Americans’ growing use of electronic communications and commercial delivery services.

“Allowing the rates to remain in effect indefinitely would result in overrecovery of the financial impact of the Great Recession on the Postal Service,” the commission wrote in a 219-page decision.

The downturn “does not eliminate the Postal Service’s obligation to respond to revenue losses by reducing costs or improving efficiency,” The Washington Post reported, citing the commission.

The increase will give the Postal Service extra revenue for the first time since a 2006 law limited rate increases to the rate of inflations, the Post said. The hike will result in an overall 6 percent jump in postal rates.

The commission’s decision comes amid opposition from s mail-dependent publishing industries, which say the increase would add millions of dollars in costs for consumers and depress mail volume.

The price increase will apply to first-class mail, magazines, newspapers, advertising mail and bills — which together account for most of the 158 billion pieces of mail delivered every year.

The Postal Service has long been struggling with declining mail volume and a congressional mandate that it should pay $5.6 billion annually to cover expected healthcare costs for future retirees.