The Sri Lankan government said Tuesday that any price increases of cement needs state approval as consumer inflation in the country rocketed past 19 per cent in November.
Cement joins a list of five items (Liquefied Petroleum Gas, milk powder, mosquito coils, boxes of matches and wheat flour)- that is price controlled.
"Cement of all types has been prescribed as a ‘specified good’ under section 18 of the Consumer Affairs Authority Act No 09 of 2003 with effect from November 01, 2006," the Consumer Affairs Authority said in a public notice on Tuesday.
"Importers, manufacturers and traders of the above item are required from November 01 to submit all price revision applications to the Consumer Affairs Authority for examination and approval and are hereby advised not to make any price revisions until after the authority has examined and approved in writing their applications."
A 50 kilo bag of cement currently sells at between 610 and 630 rupees,, with about 12 local players, the consumer watchdog said.
The island’s annual demand for cement is around 3.8Mt, with Tokyo Cement and Holcim Lanka Ltd, supplying around 30 per cent each of the market.
Sri Lanka also recently slashed import tariffs on a host of goods from India under a free trade agreement, but exempted cement for at least two years to protect the local industry.
The protection is short lived however, as Indian cement imports comes off the protected item list in 2008 and becomes duty free.
Economists say Sri Lanka’s inflation has been rising due to excessive borrowing from the banking sector to finance the deficit.