Who will protect the Consumer?

In researching a recent article on gas prices it came to my attention that the high prices were not due only to Petrojam but that dealers were also contributing to higher prices.  I have observed that most service stations are operating with a $10 – $15 margin on 87 gasoline.  I believe that it was about two years ago that I wrote about the phenomenon of businesses operating in a recessionary time.  I mentioned that as demand falls there is a tendency to adjust prices upward in order to maintain the same level of profits.  However this action results in reduced demand leading to higher prices and the cycle continues.  This is probably the case with the recent announcement by Caribbean Cement Company.  At a time when little construction is taking place it seems crazy to be increasing prices.

All of these happenings when added to the fact that there have been reductions in the prices of most commodities worldwide caused me to reflect on the fact that there is little protection for the average consumer.  We often like to refer to the United States as a free market system in which businesses are able to charge whatever they want.  However this is far from the truth as there are many regulatory bodies that monitor the situation to ensure that consumers are not being overcharged.  Since the recession started I have seen several rulings which have come against the business sector.  These include the recommendation that banks were charging too much for bank charges and that a cap should be placed on the amount that they can charge, the rates being charged on credit cards and the charges for using the card were too high and that property insurance rates were too high and should be reduced to a specific level.

Although we have a consumer affairs organization in Jamaica, it seems to focus more on providing information to consumers about choices and remedies related to the purchase of unfit goods.  There is no agency that seeks to address the problem of overcharging or who has the power to actually do something about it.  Time after time businesses increase their selling prices as the cost of inputs increase but they rarely ever reduce them when the reverse occurs.  Instead it is seen as an opportunity to rip off the Jamaican public and a chance to make super profits.

If the government is serious about seeing this country move forward, it must ensure that the few do not get wealthy at the expense of the poor.  Failure to do so will inevitably lead to social unrest as persons will simply not be able to afford anything.  There must be a limit as to what one can charge otherwise next year this time service stations may be adding $50 – $60 as their margins.