Price Fixing Vs Price Regulation

Price Fixing Vs Price Regulation

Following a price survey carried out by The Federal Government, it was discovered that a fruit blender called NINJA used at home and restaurants when priced in Texas, United States and was sold for 89 dollars which is around N140,000.00 if converted to naira but the same product but when priced in a supermarket in Victoria Island in Lagos was displayed for N944,999.00.?

Let’s do a bit of Maths: N944,999 - N140,000 = N804,999

To make things even worse was when Mr. Abdul Samad Rabiu who is an astute businessman, philanthropist and industrialist and CEO of BUA Cements revealed that despite BUA Cement’s effort to sell cement at a fair price of N3,500 per bag, their plan was undermined by dealers who inflated prices to as much as N7,000 to N8,000 per bag

The Federal Government of Nigeria through the Federal Competition and Consumer Protection Commission immediately issued a one-month deadline to traders and other market stakeholders involved to reduce pricing to crash the prices of goods.

In the meeting where this was addressed, some of the traders pinned the price hike on the inconsistency of the exchange rate, some days it’s N1500 per dollar and some other days it’s N1605 per dollar.?

Some importers voiced out how the cost of the high import duty has contributed to the increased price of consumer goods and services we have seen.?

This announcement by the FG didn’t come without some backlashes especially from the Organized Private Sector who stated unequivocally that the Federal Competition and Consumer Protection Commission has no right to dictate prices but to regulate prices.?

How true??

Prices in a competitive market like ours in Nigeria must be determined by the forces of demand and supply and not dictated by the government without an incentive that can be used as a negotiation tool for price reduction.

To clarify the instruction, The Federal Competition and Consumer Protection Commission (FCCPC) while emphasizing its intention to see that prices are reduced, clarified that its recent price reduction directive to businesses aims to curb 'exploitative' practices in the marketplace, rather than controlling prices.

It said businesses involved in price fixing and gouging, would be penalized, as both practices harm consumers and are considered unfair business practices.

A statement by the FCCPC stated that “The FCCPC does not seek to suppress private enterprise; our role is to ensure that the market operates on principles of fairness, transparency, and accountability,” the statement added.

While the FCCPC can yield to promoting competition for economic health, as evidenced in sectors like telecommunications, it is equally important to enforce laws against practices that undermine fair competition.


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