PRICE regulation by Government is not the best thing economically when trying to promote competition in the market,” says Deputy Prime Minister and Finance Minister Professor Biman Prasad.
He said this in response to questions from Opposition Member of Parliament Alvick Maharaj on whether Government intends to do price regulation on industries who get duty protection so that their gross profit is contained and not more than their duty protection.
“I think the question makes a lot of sense and I thank the Honorable Minister because he’s right. If the producers are not passing the benefits of protection – the profits that they make to the consumers, then it is unethical and some of them engage in unethical pricing,” Mr Prasad said.
“I think, as a Government, price control is economically not the best thing to do when you’re trying to promote competition and all that, but if the Government finds that our producers, having had this huge protection, are not moving towards providing a price which makes sense, from their point of view, the profit they make and what the Government provides in terms of protection, then the question is right, that will have to look at price regulation as well.”
He said there was a 32 per cent import protection on dairy products for 10 years and now there’s a reduction in the price of milk and dairy products after that 10-year period.
“We protected one company and look at the prices of milk, butter, et cetera, until that 10-year period ended. You now see a reduction in the price of milk and dairy products generally.”
Mr Prasad said the issue about price regulation in the face of a lot of protection, was that a lot of the producers have carried on like that for many, many years at the expense of the consumers.
