Consumer exploitation in Ramazan

The governments should evaluate prices and supply well before the arrival of the holy month

Consumer exploitation in Ramazan


or Muslims worldwide, the holy month of Ramazan is a time for reflection, compassion and generosity. In non-Muslim majority countries like the United Kingdom, it’s heartening to see retailers embrace the spirit of the occasion and offer discounts on products consumed by Muslims during this period.

As an international student in London, I feel a sense of inclusivity and respect when I see Ramazan Deals prominently displayed in supermarkets. However, this feeling of warmth quickly dissipates when I recall the stark contrast of the Ramazan experience in my home country, Pakistan.

For many years, Ramazan in Pakistan has been marred by rampant inflation. The prices of essential commodities skyrocket during this month. The irony is glaring — a time meant for empathy and giving becomes a period of exploitation and hardship for many. The impact of this inflation is most severe on the underprivileged citizens. The poor and lower-middle class, who already struggle to make ends meet, find themselves further burdened by the price hikes. The very people who should be supported during the holy month are instead left to bear the brunt of market manipulation and government inaction.

This not only erodes the spiritual essence of Ramazan but also widens the socio-economic divide. The affluent remain relatively insulated from the effects of inflation. The glaring injustice demands urgent and sustained attention from policymakers, religious leaders and the civil society.

Engel’s Law holds that households with low income will spending a larger percentage of their income on food items in comparison to middle or higher-income groups.

With prices rising, families have to make compromises. How do they adjust their budgets? Mostly by abandoning their wishes for Ramazan. No new clothes for Eid, deciding to forego dishes widely associated with Ramazan and reducing the spending on charity they may have intended. Some look for substitutes for goods that have gone out of their reach. Many end up buying relatively poor quality of the same commodities, which may be cheaper.

It is not as if forgoing the typical dishes associated with Ramazan can help one avoid overspending. Prices of commodities like onions, potatoes and green chillis to get hiked. Thus even for those who decide to forego the cuisine dedicated to Ramazan, expenditure on food exceeds expectations.

To curb Ramazan-related inflation, Prime Minister Shehbaz Sharif announced a relief package of Rs 7.5 billion. Considering the rising prices and their impact upon the public, the package was later enhanced to Rs 12.5 billion. Nevertheless, the first week of Ramazan was greeted with a 1.35 percent increase in inflation according to the Bureau of Statistics. Last year, the inflation rate stood during Ramazan had stood at 35.4 percent, the highest in five decades.

Consumer exploitation in Ramazan

Given the shortages, many consumers are willing to buy above the prices set by the government. This negates the impact of price ceilings.

The raise in the prices of essential commodities was staggering. All forms of meat - chicken, beef and mutton –registered substantial price increases. Bananas, commonly used in Ramazan for fruit chaat, became 22 percent dearer. The report revealed a 32.89 percent annual inflation rate. A news report spoke of two to threefold increase in inflation in kitchen-related items: vegetables, fruits and sugar etc.

The price surges are often blamed on ‘market forces.’ With Ramazan arriving, commodities such as dates that, are not consumed in large quantities otherwise, are in heavy demand. With rising demand, the prices soar.

This effect can be curbed by ensuring a rise in the supply of goods. However, those intending to profit from the opportunity ensure that the supply is restricted or erratic. This happens every year in Ramazan. The authorities typically act too late.

Some days ago, the new chief minister of the Punjab, Maryam Nawaz, tweeted that she had asked special magistrates to ensure that prices do not rise. Later, she confessed that the effort had failed in the absence of a ‘permanent mechanism.’

The chief minister’s comments on the absence of a permanent mechanism make one wonder about the commitment of her party and its leaders to solve an issue faced every year. Every year, the price hike is deemed an opportunity. First, there is a sudden raise in prices; then government leaders announce relief packages and other actions.

From an economic planning point of view, the last minute effort is a recipe for failure. Special price schemes are not how markets work. Setting price ceilings is like trying to extinguish a forest fire with a household fire extinguisher. The market forces must be dealt with differently. The food inflation is also demoralising for farmers as hoarders and black marketers are its only beneficiaries. When a government announces price ceilings, potentially threatening their profits, they reduce the supply of the commodities.

Given the shortage many users are willing to buy above the prices set by the government. This negates the impact of price ceilings. The producers suffers the most. Farmers, already facing exploitation by landlords and middle men, see the price control as a justification to cut into their earnings.

Outright subsidies are no solution either. Often, the impact of the subsidies does not reach the intended target as retailers and wholesalers split the benefit. It has been reported that some Utility Stores are still selling the commodities at higher than the notified prices.

There is a need to evaluate prices and supply well before the arrival of the holy month. The government should improve the production/ import of commodities or imports to ensure that there are no shortages. The aim should be to ensure that there is no economic stress on citizens during the Holy month and to mitigate the impact of inflation.

The writer is the co-founder of community learning platform HamSukhan. He holds a master’s from the UCL

Consumer exploitation in Ramazan