Price Regulation Under Sanctions: International Experience

Abstract

The object of the article is price shocks in Russia resulting from international sanctions imposed in connection with military action in Ukraine. The aim of the paper is to examine the most useful international experience of administrative price regulation for vital commodities. In particular, the study describes price control in India, China, Kyrgyzstan, Venezuela, Iran, Bolivia, Saudi Arabia, as well as in Russia itself. The synthesis of regulatory practices forms the basis of a generalised scheme, taking into account the stages, scale, timing and methods of government intervention. Furthermore, the need to combine static and dynamic price regulation for different product groups is stressed. Among the countries considered, the most interesting and original experience is that of India's regulation of corporate stocks (e.g. retail chains) to give rhythmic sales and the practice of marking the Maximum Retail Price (MRP) for certain types of goods. The authors argue for the possibility of adjusting the utility price index to account for sharp spikes in inflation in the initial period of sanctions, and for reducing the operational period for monitoring prices for decision-making from 60 to 30 days.