The main objective of this study was to examine the factors which compel the poor to pay more than the better off sections of the society for the goods they buy. The study revealed that the poor end up paying more prices because they buy essential commodities in small quantities daily or twice a week from small shops located in their localities. These shops are able to charge much higher prices than the shops in the main markets because of lack of mobility on the part of poor people and the ignorance about the prices in the main markets. The Fair Price Shops are of little help in reviving the squeeze operating on the abject poor from the side of consumption. Certain ways of managing the fair price shops are suggested to take care of the needs of poor. For example, the study found that even those poor people who had ration cards, very often did not have money to buy their ration quota when turn came. Also they have to visit fair price shops 2 or 3 times to get their quota. This involves loss of wages for those days. Similarly, the commodity mix applied buy the fair price shops has to be different to meet the needs of poor. All these problems can be solved if the suggestions of the study are accepted.