Accordingly, if the measure entails wronging people—coercing them without right to sell for a price they do not accept, or preventing them from what Allah has permitted—then it is forbidden. But if it realizes fairness among people—such as obliging them to transact for the going market price and preventing them from taking an unlawful surplus above that equivalent—then it is permissible, indeed required. In brief, price-fixing is allowable on two conditions:

1. The commodity in question must be one whose need is common to the whole population.
2. The high price must be due either to a shortage in supply or an excessive demand.

Whenever these two conditions are met, price-fixing is an act of justice and a means of safeguarding the public interest—for example, fixing the prices of meat, bread, medicine, and similar necessities.

Decision of the Islamic Fiqh Academy Concerning the Regulation of Merchants’ Profits

In the name of Allah, the Lord of all worlds. May blessings and peace be upon our master and Prophet, Muhammad, the Seal of the Prophets, and upon his family and Companions.

The Council of the Islamic Fiqh Academy, convened for its fifth session in Kuwait from 1–6 Jumada al-Awwal 1409 AH (10–15 December 1988 CE), after reviewing the papers submitted by members and experts on the subject of “Regulating Merchants’ Profits” and listening to the discussions that took place, resolved the following:

First: The primary rule established by the textual evidence and the principles of Islamic law is to leave people free in their buying and selling and in the disposal of their property and wealth, within the framework of the noble Islamic sharīʿah and its guidelines, in accordance with the general statement of Allah the Exalted: “O you who believe, do not consume one another’s wealth unjustly, unless it be trade conducted by mutual consent among you.” (Qur’an 4:29)