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ISLAMABAD : The government is considering a crackdown on cement manufacturers against raising cement prices to over Rs 400 per 50 kg bag, without any justification, official sources told Business Recorder.
The issue was discussed in the meeting of the Economic Co-ordination Committee (ECC) of the Cabinet on Wednesday wherein it was confirmed that cement manufacturers have raised the price of 50 kg cement bag to Rs 400 at a time when the construction season is at peak in the country.
Sources said that Finance Ministry has been asked to investigate the reasons for the sudden increase in cement prices when there was no substantial change in input costs. Analysts have calculated that the cost one 50 kg cement bag is in the range of Rs 230-240, which means that the manufacturers are overcharging the consumers by approximately Rs 160 per bag.
The Competition Commission of Pakistan (CCP), which was also conducting investigation against cement manufacturers, has already intimated to the concerned quarters that it was under severe pressure from cement cartel. "ECC expressed serious concern over a dramatic increase in cement prices, and Finance Ministry has been directed to investigate the factors behind this increase," sources said.
Finance Minister Naveed Qamar, who received congratulations from ECC members for conducting the committee's meeting in Prime Minister Secretariat, was of the view that the government could not move against cement manufacturers until per bag cost was calculated, sources added.
"Investigate what has happened, as the government can not take action against cement manufacturers without concrete evidence of profiteering," Qamar directed Finance Ministry. Manzoor Wattoo, Prime Minister's Advisor on Industries and Production, praised Naveed Qamar's chairmanship of the ECC. ECC empowered the Daily Monitoring Committee, headed by the Finance Minister, to take policy decisions, as and when required, and seek ex post facto approval from the ECC of those decisions. The ECC extended ex post facto approval of a decision taken by Daily Monitoring Committee last week regarding ban on sugar export.
Sources said that Wattoo also apprised the ECC that he had already convened a meeting with cement manufacturers for Thursday to know why cement manufacturers had increased prices when there was no substantial increase in input costs, except the one percent GST and federal excise duty (FED).
Sources said that Manzoor on Wednesday evening called all concerned officers of the Industries Ministry to finalise government strategy to deal with All Pakistan Cement Manufactures Association (APCMA).
Sources said that the government was considering withdrawing recent increase of 20 percent in federal excise duty (FED) on cement because of its negative impact on construction industry throughout the country. The government had raised FED by Rs 150 per ton to Rs 900 from Rs 750 in the federal budget besides enhancing one percent general sales tax (GST).
Copyright Business Recorder, 2008
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