National Treasury Cabinet Secretary will have powers to fix the maximum retail and wholesale prices of essential goods if a draft Bill before Parliament is enacted.
The Price Control (Essential Goods) (Amendment) Bill 2023 seeks to amend the Price Control (Essential Goods) Act, No. 26 of 2011.
The Bill sponsored by Khwisero MP Christopher Aseka names essential goods such as maize, maize flour, wheat, wheat flour, rice, cooking fat, cooking oil, sugar, paraffin, diesel and petrol.
Further, the amendment provides that the Cabinet Secretary shall provide for the appropriate reduction of the tariffs and taxes on essential goods to be factored in every year’s financial statements.
“The primary objective of price control is to shield consumers from sudden and excessive price increases, especially for items that are essential for daily life such as food, medicine and energy,” Aseka stated.
Appearing before the Budget and Appropriations Committee, Aseka added that by imposing limits on certain goods, governments can prevent profiteering and price gouging during times of volatility or supply disruptions.
“This safeguards consumers’ purchasing power and contributes to social welfare by ensuring basic necessities remain within reach even for the most vulnerable members of society,” Aseka said.
Price control refers to a limit set by a government on the price that can be charged by companies for particular products or services.
The minimum price is called a ‘price floor’ and the maximum price is referred to as ‘price ceiling.’
Aseka cited the Price Control Act in Nigeria which covers a range of essential goods and services that are deemed important for consumers and the general public.
“These goods and services are subject to price control measures to ensure their availability and affordability. They include flour, milk, salt, sugar, petroleum products, motorbikes and their spare parts,” he told the committee.
He further added that price controls can promote fair competition and prevent monopolistic practices in the market.
Committee chair Ndindi Nyoro said all leaders are concerned with the high cost of living but the prices of some commodities are determined by demand and supply factors.
“Every producer is seeking to sell at the highest price while all consumers want to but at the lowest price,” he said.
He warned of a risk of scarcity of commodities if their prices are lowered.
“No producer will want to continue with the business if prices are lowered unless we find money to give them to bridge the gap,” said Nyoro, who is also the MP for Kiharu.
Aseka maintained that price control would strike a balance between consumer protection and market dynamics.