Pakistan Govt may allow imports

Pakistan Govt may allow imports
Published: 02 August 2005

The Pakistan government is considering allowing the import of cement to bring down the cement prices as cement manufacturers have turned down the persistent demand of the government to decrease the cement prices to around Rs 230 per bag, a senior government official told Daily Times. “This is the last option we are using to bring down the cement prices,” the official said, adding that the Ministry of Industries, Production and Special Initiatives and the Monopoly Control Authority (MCA) had by and large supported the permission to import cement.

Already pitted against the sugar industry, which has been allowed the duty-free import of sugar, and against the car industry, which has been further facilitated through permission to import used cars under the gift and baggage scheme, permission to import cement will open another front for the government against the All Pakistan Cement Manufacturers Association (APCMA).

The official, however, refused to divulge any detail whether a summary regarding permission of cement import had been sent to the Economic Coordination Commi-ttee of the federal cabinet (ECC). However, the official confirmed that the Prime Minister’s Secre-tariat had been informed in writing on the issue. A bag of imported cement has been calculated to reach the country at around Rs 214 under the existing tax regime, which is Rs 750 per metric ton (central excise duty) and around 6 percent withholding tax, said the official. However, the price of the bag could be brought down further if the government agreed to give some concessions in the existing duties and taxes, according to official. The calculations also suggest that the imported cement could be provided to consumers at around Rs 220 against the price of the local manufactured cement, which is at present available at between Rs 290 and Rs 300 per 50kg bag.

The APCMA says that the prices witnessed an abrupt increase from Rs 230 and Rs 240 per bag to around Rs 330 in the last four months or so due to an unexpected surge in the demand. According to cement manufacturers, the cement prices are coming down.

The cement manufacturers, which are in verbal cartel agreement, set the minimum benchmark of Rs 275 per bag, which the APCMA regards as the appropriate price of a cement bag in light of the rising inflation trend in the country.

The APCMA has persistently been asking the government to withdraw the central excise duty (CED) levied on cement, which is around Rs 37 per bag, and the request is not being entertained by the government.