MCA to propose cement price limits

MCA to propose cement price limits
Published: 15 August 2005

The Pakistan Monopoly Control Authority (MCA) has decided to propose to the government its own price of cement that will be calculated on the basis of the actual cost of cement manufacturing, a government official said. The price to be proposed by the MCA will give the government a guideline for taking action against the All Pakistan Cement Manufacturers Association (APCMA) like the one taken in 1998 when the cement industry was forced to
reduce the prices, the official said.

The Ministry of Industries, the MCA and other concerned agencies of the government have failed to persuade the cement manufacturers for reduction in the cement prices as the government wants the price at around Rs 220 per bag. While the cement manufacturers have resisted all the government pressure as they say that the existing cement price is reasonable in light of inflation and other factors which have increased the cost of production.

The price of cement stood at around Rs 190 per bag in January this year. The price shot up to Rs 330 or so during the March-June period. This instant jump in the cement prices irked the government and it instructed all the concerned ministries and department to investigate the issue. However, the price of cement came down, after it touched Rs 330 or so per bar in March- June to Rs 290 per bag presently. However, the government still considers the price much high.

The retail price of cement must not reduced than Rs 275 per bag, according to the APCMA. Because of inflation, and other factors, the cost of cement
production has increased. The APCMA also called for reduction or withdrawal of Central Excise Duty (CED) on cement which is around Rs 37 per bag.
According to some reports, the cement manufacturers offered that they could provide the cement at Rs 255 per bag to the government and the latter should
have the responsibility to provide it to the consumers.