Cement price, cost statistics: MoF and CCP unlikely to endorse industries ministry's calculations

The Finance Ministry and the Competition Commission of Pakistan are unlikely to endorse cement prices calculated by the Industries Ministry and its reliance on cost statistics provided by All Pakistan Cement Manufacturers Association, well-placed sources told Business Recorder.
The sources said the CCP, which is actively investigating the charge of cartelisation against cement manufacturers, has calculated Rs 285 per bag retail price; while the Industries Ministry believes retail price should be between Rs 320 and Rs 330 per bag which means the ministry is allowing cement manufacturers Rs 25-35 per bag more than the Commission.
The CCP is likely to submit its recommendations to all the concerned ministries and also provide the names of officials who are complicit with cement manufacturers in fleecing the consumers, the sources added. The Finance Ministry which is also investigating reasons for cement price hike has challenged the Industries Ministry's reliance on cost statistics provided by APCMA, the sources maintained.
The Finance Ministry has to table its report in the forthcoming meeting of the Economic Co-ordination Committee (ECC) of the Cabinet. However, the Industries Ministry's much talked about proposals ie ban on export of cement or import of Chinese cement or crackdown have horrified manufacturers as they told Business Recorder that the government has assured them that no such crackdown on cement industry was being mulled.
A spokesman of APCMA said in a statement that representatives of cement industry are regularly in touch with the Ministry of Industries and that there are no misperceptions in the government regarding the industry.
There is no difference of opinion between the government and manufacturers: both believe that the unprecedented increase in the price of coal in international markets (which is more than $200 per ton) has contributed towards the increase in cost of manufacturing.
At this rate, the cost of coal alone to manufacture one bag of cement is more than Rs 150. The total government taxation is Rs 96 on one bag of cement. In addition to this the cost of electricity has increased by more than 20 percent in the last few months and cost of transportation has gone up by 30 percent in last three months in accordance with the increase in the price of diesel.
All these factors are impacting on the cost of manufacturing cement. The association is of the view that cement industry is investment intensive and each company has to borrow billions of rupees to put up a cement plant. Any increase in interest rate has serious repercussions on the cost of cement, they added.