Call for price ceilings :: Khaleej Times

Quoting "The Monitor":

We believe that the economic bodies in the country should meet and chalk out a certain ceiling for prices of foodstuff and other essential consumer goods, and enforce its application by all those involved in the trade. It should be an exhaustive list, covering each and every item on that shelf that people buy for daily use. Only this will help preserve and safeguard the interests of both the consumer and the dealer.

Price ceilings would be very foolish - as any good student of economics would understand.

The Gulf News today reports:

The Department of Planning and Economy in Abu Dhabi, in conjunction with the Department of Municipalities and Agriculture, has decided to penalise traders who might choose to increase commodity prices on the pretext that petrol prices have been raised, according to official sources.

Petrol, however, is used in production and transportation. When petrol prices rise, costs rise. As sellers see their costs rise they reduce their supply to the market and final goods prices rise. If prices are not allowed to increase, then shortages arise.

Authorities should instead focus their attention on sellers who conspire together to raise prices, and on dissolving existing government-sanctioned producer unions that set prices. It is these actions that will promote the vigorous competition in the marketplace that is the consumer's best protection.