Islamic Economics Explained #

Original Question: Say for example there is a shortage of sugar. A store was willing to sell sugar for a marked-up price. Are we allowed to buy said sugar at its heightened price?
It is permissible to sell sugar or any commodity at a premium if certain conditions are met.

Firstly, if the supply of the commodity is low and the government has set a fixed price for the commodity, it is wrong for a buyer and seller to violate the government mandate and trade at a price higher than what is mandated.Secondly, the trade should not be made at the expense of others.

There are instances where a buyer convinces a seller to cancel someone else’s purchase on the grounds that they will buy the commodity in question at a higher price.

When it comes to cancelling someone else’s purchase, this breaches one of the prohibitions of the Prophet ﷺ: “(A Muslim) should not enter into a transaction when others have already negotiated.” Hadith narrated by Imam Muslim.