ISLAMABAD (February 20 2007): The government is likely to impose ban on cement export, if the manufacturers showed reluctance to bring down retail prices to Rs 230-240 per bag, as Prime Minister Shaukat Aziz has termed the current prices as 'manipulated', official sources told Business Recorder.

The Ministry of Industries and Production has convened a meeting on Tuesday in which representatives of builders and developers' associations have also been invited, who have refused to purchase cement on new prices.

"The recent upsurge in cement prices is manipulative, rather than market-driven," sources quoted Prime Minister Shaukat Aziz as firmly asserting at a previous Cabinet meeting. Sources said that the Prime Minister, who was presiding over the meeting, agreed with the ministers who raised voice against recent hike in cement prices, and directed the Industries Minister to take steps for further reducing the prices.

The government has doubt that All Pakistan Cement Manufacturers Association (APCMA) would accept Rs 220 per bag retail price, which would definitely make the situation from bad to worse, opined an official in the government.

However, he was of the view that the upsurge in cement prices in the month of February was very serious, as some raise was expected in March when construction activities increase.

Another official said that the option of import was not feasible at present stage. He argued that if the government restored Rs 60 subsidy per bag for import purpose, the landed cost would be around Rs 280 per bag. Asked whether the government could not enhance subsidy amount to facilitate imports, he did not agree.

Another official gave a totally different view on the possibility of ban on exports, saying that the Afghan government would pressurise Pakistan to lift the ban on export. The Monopoly Control Authority (MCA) has also been directed to investigate the reasons for sharp increase in cement prices. The real issue is capacity utilisation, as the figures of both sides, cement manufacturers and the government, were different from each other.

The APCMA is of the view that all cement plants are being run on 77 percent capacity, while the government believes that it is 71 percent. This issue would also come under discussion in Tuesday's meeting, as the associations of builders and developers are expected to discuss some hard facts.

Copyright Business Recorder, 2007