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Home Business

Government attempts at price fixing are distorting prices and causing price rises: Husni Bey

bySami Zaptia
March 20, 2022
Reading Time: 2 mins read
A A
Tripoli’s browned off bakers go on strike

Bread prices rose overnight by about a third last week purportedly due to the Ukraine war. The incumbent government says there is no justification for this and has ordered prices revert to their original level. Businessman Husni Bey says government should not interfere in markets (Photo: Archives).

Commenting exclusively to Libya Herald yesterday on last week’s article on price increases in Libya, leading Libyan businessman, Husni Bey said ‘‘It all comes down to government mismanagement, wrong and or distortionist economic and monetary policies. The fundamental rule of pricing equilibrium is supply and demand.’’

It will be recalled that there was a public outrage (on social media at least) last week as prices of foodstuffs rose sharply, including bread. This was blamed on the Ukraine war and world markets externally, and the battle for the prime ministership domestically.

‘‘Government interference in this basic rule causes distortions and leads to imbalances and distortions. The Russian war on Ukraine broke out, it is normal for markets to react, and it is better to let market forces find their equilibrium.

Instead, our government decided to fix prices for major commodities, and to seal and shut warehouses of whoever was found selling above the imposed pricing.

This caused two reactions:

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First: Importers stopped importing as the imposed government prices are below cost.

Secondly: The supply decreased as many traders preferred to close their warehouse rather than having their premises sealed and shut by the authorities. These factors combined reduced the supply and the fear caused a sharp increase in demand.

Conclusion…!
Hence ironically, the government’s actions in attempting to fix market prices itself resulted in an end result of distorted high prices.’’, concluded businessman Husni Bey.

 

Rising Libyan food prices on the eve of Ramadan: caused by Ukraine war and other external factors or simple profiteering? – LibyaHerald

Exclusive: There is no free meal in life and the Libyan people will finally end up paying the cost for all of Mr Aldabaiba’s freebies – he keeps on promising right, left and centre within Libya and beyond its borders: Husni Bey – LibyaHerald

In an effort to bring prices down, Libya exempts food imports from all duties – LibyaHerald

Ministry of Economy calls on traders to reduce prices in Ramadan – Chamber of Commerce supports call – LibyaHerald

Most Tripoli bakeries close due to new exchange rate raising flour prices – LibyaHerald

Prices will decrease by 35-45 percent because of dinar devaluation: CBL expert – LibyaHerald

Average Eid ram prices fall in eastern Libya to about US$ 163 – LibyaHerald

Libyan Business Council warns of food shortages and increased prices due to CBL’s inflexible Letters of Credit policy – LibyaHerald

 

 

 

 

Tags: Husni BeyInflation cost of livingprice rises

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