The Ministry of Industries and Production has opposed any relaxation to cement manufacturers till such time as they set ex-factory price at Rs 275 per bag and advertise retail price in the newspapers, official sources told Business Recorder on Sunday.
The Economic Co-ordination Committee (ECC) of the Cabinet in its meeting on Monday is likely to discuss the impact of earlier decision taken to stabilise the prices of this commodity in the local market.
"Cement prices have stabilised and continue to decline gradually in the wake of government decision, and are expected to further come down due to import in the ensuing months and reduction in ex-factory rates," sources remarked.
They said that the Industries Ministry had made it clear to All Pakistan Cement Manufacturers Association (APCMA), at a meeting on May 18, that in order to provide relief to the common man the government wanted the cement prices at the level of Rs 280 per bag, which was the rate prevailing in February.
The ministry and cement manufacturers, after detailed deliberations on cement price took the following decisions:
i) The APCMA shall ensure availability of cement in the domestic market on the retail price ranging between Rs 285 and Rs 295 per bag, besides fixing ex-factory price at Rs 275.
ii) The cement manufacturers shall advertise the retail price in leading newspapers in order to avoid black marketing by dealers and retailers.
iii) The government shall consider the request of cement manufacturers to impose (quantity) limit on import and restoration of duty drawback on export of a limited quantity of 100,000 tons of cement per month on first-come-first-served basis.
But it has been suggested to ECC that as soon as the conditions regarding restoring of duty drawback on export and placing limit upon imports qualifying for freight subsidy are met, the ministry would come up with appropriate proposals, sources said.
They said that cement manufacturers had expressed grave concern over ban on its export, which according to them would bring a glut in the market by September.
The APCMA was also of the view that Pakistan would not only lose the hard-won export market in Afghanistan to India or Central Asian States due to ban on export, but the investors too would remain shy to make further investment.
"If the present policies continue, the future of cement industry in Pakistan seems bleak," cement manufacturers said, according to sources.
The APCMA had agreed to convey agreeable sale price to the Industries Ministry after consultations with member factories but they did not fulfil the commitment.
It is pertinent to mention that the Industries Ministry has formally included a clause in the Price Control Act, empowering provincial and district governments to check hoarding in their respective areas.
According to the Act, sources said, the hoarders would have to face three years imprisonment or Rs 100,000 fine in case of violating the law.
The government would not resume rebate on cement export to Afghanistan until cement manufacturers fix their price between Rs 285-295 per bag in writing on sustained basis.