Consumers hold the power against price gouging

PETALING JAYA: Consumers will play a key role in keeping businesses that raise prices haphazardly in check, say an economist.

Dr Geoffrey Williams suggests consumers switch their spending to businesses with fair prices, essentially punishing bad companies and rewarding good ones.

He said not all businesses will raise prices as the government is still providing subsidised diesel at the same price of RM2.15 per litre to qualified companies in transportation and logistics.

“There is no general price hike. Consumers can prevent any ripple effect on the economy by being vigilant against price gouging,” Williams added.

Malaysia University Science and Technology economist Prof Emeritus Dr Barjoyai Bardai said the price increase is an overreaction from businesses which might be a silver lining for consumers in the long run.

“Malaysian consumers are usually very passive when it comes to finding alternatives but with this price hike, they should finally come to understand the need to make smarter purchases.

“Similar to the recent boycott of Israel-linked brands, the economy as a whole should barely be affected so long as consumers opt for cheaper alternatives and brands that choose to not hike their prices.,” he said.

While there might be a short-term impact on consumption, it could ultimately promote healthier market competition, benefiting both the economy and public interest, he added.

Barjoyai recommends that relevant ministries publish public notices outlining expected cost increases to empower consumers to make better price comparisons.

Centre for Market Education chief executive officer and economist Dr Carmelo Ferlito noted that a broader plan for urban mobility will be useful at reducing the impact of the price hikes.

“The inflationary effect of price hikes can be more moderate if viable alternatives are available, combined with greater demand elasticity.

“This should have been the plan from the start instead of the frequent introduction of subsidies which has allowed the economy to become addicted to them,” he said.

Universiti Malaysia Sarawak honorary professor and economist Datuk Dr Madeline Berma said more should be done to help low-income households adapt to the price hike.

“Low-income households spend a higher percentage on food and transportation as compared to middle and higher-income households, leaving them very open to being exploited,” she said.

“The new targeted subsidy only eases the pain of businesses but does not address the root cause of the problem, which is the lack of consumer financial literacy.”