The UAE Ministry of Economy says there will not be any immediate revision on the price cap of cement, even as representatives of factories said they are producing at a loss. Despite a drastic fall in oil prices, some cement manufacturers yesterday told Emirates Business they were producing 50kg cement bags at a loss.
While the price of cement sold by factories is fixed, traders are selling imported cement cheaper by Dh30 per tonne. "At present we are selling at Dh360/t, while imported cement is being sold at Dh330. On every bag of cement we are losing almost three to four per cent on the production cost," said Mustafa Gorgunel, General Manager of Union Cement Norcem Co.
Earlier this year, the UAE Government, following an increase in the price of cement due to severe shortage, introduced a price cap and removed the five-per cent customs duty on import of steel and cement.
The government signed a memorandum of understanding with cement manufactures, according to which factories raised the production of 50kg cement bags from 150,000 to 250,000 daily and the price per bag was fixed at Dh16.
Mohammed Ahmed bin Abdul Aziz, Undersecretary at the Ministry of Economy, said the price cap will not be revised at present. "We aim for price stability in the national retail and wholesale markets, and aim to create a high level of competency marked by safety and quality," said Aziz. According to him, an MoU has also been signed with local government departments to watch the market and prevent any exploitation, which could likely affect the open market and the UAE’s commitment to free-market principles.