Local cement prices twice region’s average

Local cement prices twice region’s average

KARACHI: The price of cement in Pakistan is almost double as compared to neighbouring countries, builders say, accusing local cement makers of minting money on the pretext of Gas Infrastructure Development Cess (GIDC) and customs duty on coal.

In a statement issued on Monday, Association of Builders and Developers (ABAD) Chairman Hanif Gohar said that, in response to its letter, All-Pakistan Cement Manufacturers Association (APCMA) Chairman Muhammad Ali Tabba has categorically stated that cement manufacturers were unable to cut prices due to imposition of GIDC and six per cent customs duty on coal imports.

But GIDC Act, 2015 did not mention the imposition of the cess on the cement sector, explained Mr Gohar.

Moreover, officials of the Sui Southern Gas Company Limited (SSGCL) have also clarified that there was no GIDC on cement factories.

Moreover, coal prices on the international market have been on the wane for nearly eight years, coming down from $140 to $50-53 a tonne at present. Therefore, the coal was still cheap despite consideration of the customs duty, the ABAD chairman said.

He said that at around Rs500, the retail price of a 50kg cement bag in Pakistan was almost double as compared to Rs255 in China, Rs231 in Iran, Rs292 in India and Rs262 in the United Arab Emirates (UAE).

Pakistani cement producers were exporting cement to the UAE at much lower rates, he said. “How can they claim they cannot reduce prices?” he wondered.

He said global coal prices were $81.42 a tonne in 2013, $71.36 in 2014 and $56.78 in 2015, and have now further dropped to $50-53 a tonne this year.

On the contrary, cement manufacturers in Pakistan kept on raising prices all those years, from Rs481 in 2013 to Rs521 in 2014 to Rs518 in 2015, Mr Gohar said. The commodity is still being sold at more than Rs500.

He said the Competition Commission of Pakistan (CCP) imposed a Rs6 billion fine on cement manufacturers for cartelisation, but the penalty was waived off giving them free hand to raise prices at whim.

Source: http://www.dawn.com/news/1252946/local-cement-prices-twice-regions-average

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