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Balancing sellers’ and consumers’ interests 

02 Nov 2022

Everyone wants relief, fair treatment, and a sense of safety, and everyone demands the same from the Government. Even though the Government is currently limited in its ability to provide these to the people amidst this crisis, those who demand price changes in accordance with increased and reduced costs want the Government to make even the slightest of price revisions within those limits.   These are concerns that were at the centre of almost all dialogues on managing the prices of consumer goods. After a spate of price hikes of almost all goods within the past few months, now that the wholesale prices of corn flour and the prices of petrol and diesel have been reduced by a considerable amount, the crisis-affected public seems determined to obtain price reductions from traders to match decreased production/import costs. Three-wheeler and bus operators have refused to slash fares until the Government makes arrangements for them to obtain a satisfactory amount of fuel, while bakery products were marginally reduced – although only after some hesitation on the part of bakery owners. However, many members of the general public that The Morning has spoken to are extremely dissatisfied about the lack or meagre nature of price reductions, which they feel are incommensurate with the reduced costs of importation or production, and therefore unfair. They demand the Government’s intervention to ensure fair price fluctuations for consumers. Before the crisis, the consumer authorities had a considerable influence on the prices of goods and certain services, and maximum retail prices for goods and price formulas for bus fares were standard rules. However, the crisis has made it difficult to maintain such controls, and the prices of most goods are now determined by traders. Traders increasing prices or maintaining them at a preferred level has become the new normal, even though how fair those prices are is a controversial matter.  On the one hand, traders have to increase the prices of goods and services to not only cover costs and to make profits, but also to cover the losses that they have been suffering after the outbreak of the economic crisis. On the other hand, the inflation-stricken public has a right to demand price changes in accordance with the changing costs of production or importation. Balancing the two sides is a challenge that the Government must meet in order to ensure that neither traders nor consumers enjoy undue advantage or suffer losses unreasonably. This is however a challenge that is far more complex than declaring a maximum retail price for a product, and most importantly, a task that should be an ongoing process due to constant cost fluctuations. Declaring price formulas for essential consumer goods such as the fuel pricing formula, which has proven to be effective and reasonable, is one suggestion that has been presented in this regard. While the actual costs of a product, especially in terms of food, vary depending on a plethora of reasons, a system that compels traders to reasonably price their products and service providers to provide services at rates that reflect actual costs and a reasonable profit margin is the people’s demand. No amount of price reductions would alleviate the burden of the economic crisis on the people until the Government makes sure that the relief is passed on to consumers.


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