Subject : It is Forbidden to Trade in Subsidized Goods
Fatwa Number : 1977
Date : 28-12-2011
Classified : Current Financial Issues
Fatwa Type : Search Fatawaa

Question :

Many traders buy huge amounts of goods from the Military Consumer Corporation and the Civil Service Consumer Corporation in order to maximize their profits since these goods cost less than their normal price in the commercial markets. What is the ruling of Sharia on this?

The Answer :

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

It is established in Sharia that the guardian (Ruler or those representing him) is responsible for taking care of the poor and needy. To achieve this goal, the state subsidizes some basic commodities to enable this underprivileged class to buy them at low cost. 

The state shoulders its responsibility towards the aforementioned class through establishing Military Consumer Corporations and Civil Service Consumer Corporations that provide services and commodities at low cost.

Therefore, it is forbidden to trade in subsidized commodities in private commercial markets because of the following: 

1- It defies the purpose for which the state had subsidized these goods in the first place.

2- It will harm the targeted class because it will cause the prices of these commodities to rise.

3- It violates the instructions of the ruler in the sense that the commodities are intended for consumption, not trading, and are bounded by quantities tied with consumption needs. And Allah the almighty Knows Best. 



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