Ruling on Price Increase Due to Deferred Payment

Author: Dr. Muhammad Zia-ur-Rahman Azmi (رحمہ الله)

Principle Regarding Price Increase Due to Payment Delay​

As previously mentioned, increasing the price due to deferred payment is permissible in Islam. There is no specific limit set by Shariah on the amount of this increase. Several factors influence this price adjustment, including:

✔ Duration of the payment delay – A longer period may justify a higher price.
✔ Market conditions – The economic situation, including market stability and trade activity.
✔ Supply and demand dynamics –

• If supply is high and demand is low, the profit margin decreases.
• If demand is high and supply is low, the profit margin increases.
  ✔ Other economic factors – Such as inflation, competition, and business risks.

Thus, price variations based on these legitimate factors are acceptable in Islamic finance.

[Ibn Baz: Majmu' al-Fatawa wa al-Maqalat: 19/109]