Did the Prophet Muhammad SAW Prohibit Price Fixing During Inflation?

Commerce is an activity inseparable from human life, serving as a pillar as ancient as civilisation itself. The teachings of Islam provide guidelines and rules to ensure fairness for all parties involved in trade. One such principle is found in a Hadith explaining the basis of price determination during periods of inflation within society.

Anas bin Malik (RA) narrated that during the era of the Prophet Muhammad SAW, there was a significant rise in the prices of goods in the markets of Medina. The people approached the Prophet SAW, complaining, “O Messenger of Allah, prices have risen significantly, so please set a fixed price for us.”

In response to this plea, the Prophet SAW replied, “Indeed, Allah is the One who determines prices, the One who withholds and expands, and the Provider of sustenance. I hope to meet Allah without any of you bringing a claim against me for any injustice regarding blood or wealth.” (HR Ahmad 12591, Abu Daud 3451, Tirmidzi 1314, Ibnu Majah 2200).

According to Athiyah Salim, in the book Syarh Bulugh al-Maram fi Hadits al-Ahkam, the phenomenon of rising prices or inflation can be caused by several factors, including goods scarcity or attempts by certain groups to hoard large quantities of products. At times, individuals with significant capital enter the market to purchase and accumulate available goods. As Allah SWT has provided them with wealth, they use it to buy and store these items, subsequently reducing the supply in the market and causing prices to rise.