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With surprise and anguish we hear that the cement makers are conspiring to raise cement prices immediately after the budget. The cement cartel showed their teeth to the Monopoly Control Authority (MCA) many times before and made it fold its tail and run as senators and parliamentarians, the makers of law, own cement industries and are therefore, above the law.
It is believed, public memory is short but for some, it is not that short to forget that immediately after the duty-cut on cement announced in the 2003-04 budget, the cement cartel increased their prices (on average) from Rs 210 to Rs 235 per 50 kg bag. Last year, cement prices raised thrice.
I would also like to share with your other readers that after the break-up of the cement cartel in the last quarter of 2003, due to infighting, average cement prices crashed to Rs 165 per 50 kg bag. A Few months later, after the manufacturers sorted out their differences, brought the average cement prices were brought to Rs 240 per bag. This is within the knowledge of the MCA.
The MCA conducted investigation in 2003 and found evidences of existence of a cement cartel. The investigation confirmed that the cartel persuaded its members to use slightly more than half of their individual capacity to restrict supply, creating a demand-supply gap to control prices. The MCA also found that all the cement manufacturers were using 50 to 70 percent of their capacity without any justifiable reason.
The last time we heard of it the Monopoly Control Authority was said to be conducting investigation against the cartel and knowledgeable citizens believe they that have enough proof but look impotent to take effective step. We as your regular readers, feel that the regulators are not doing enough to rein in the mighty cartel as the cement cartel is again finding excuses to raise prices. A month or so ago, cement prices were raised by Rs 10 to 15 per bag without any justification.
Dadabhoy, Pakland, Falcon, Thatta Cement all raised their prices. The MCA has been discussing the issue over and over again but always deferring action for another time. The MCA, after finding the truth about the cement cartel, should have taken action but failed to do so. If my information is correct I as a citizen have the right to know why the MCA is not being dissolved.

Copyright Business Recorder, 2007

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