KARACHI (February 26 2007): The cement manufacturers have unanimously decided to set Rs 240 as the new price of cement per 50-kg bag in the domestic market after government's intervention.

A source, who is also a member of the All Pakistan Cement Manufactures Association (APCMA) told Business Recorder that the Association finally received the government directives, saying 'either to reduce cement prices straight or face the music'.

The government has taken serious notice of the soaring price of cement in the domestic market. Last week, it asked the cement manufactures to reduce the commodity price otherwise the government would consider imposing ban on the export of cement or allow duty-free import of the commodity.

The companies have cut cement prices by Rs 5-12 per 50-kg bag to Rs 243 per 50-kg bag, previously sold at Rs 255 per 50-kg bag after the ministry instruction, but now the Association has decided to fix the maximum price of cement by Rs 240 per 50-kg bag, source added.

He said that new rate has been fixed with collaboration with the member companies informally to avoid any expected action by the government against the cement manufacturers and provide relief to the general public.

The source said that Rs 240 would be the maximum price of the prime quality cement, which is reasonable for companies as well as for consumers, adding: "We have instructed all companies to minimise cement price."

He said that if any company want to sell lower than fixed price, it allows the sale on low rates, as the same companies are selling at Rs 225 per 50-kg bag.

He denied forming cartel by cement manufacturers, saying this step has been taken just for better interest of companies and consumers.

This price has been fixed after the clear-cut government instruction, he said, adding: "We are expecting that if the prices remain high than it could be possible that the government may impose ban on the export of cement."

"After this fixation of the prices, cement would be available in the domestic market between Rs 220 and Rs 240 per 50-kg bag in the domestic market," he added. It may be mentioned that the cement companies had increased prices 20 days ago from Rs 200-220 to Rs 240-280 per 50-kg bag.

Later, the ministry of industries and production called a meeting of manufactures and fixed the maximum retail price of Rs 260 per 50-kg bag, while on last Tuesday the ministry, during the second meeting of the stakeholders instructed the manufacturers to cut prices further as that was seemed to be 'unjustified'.

Copyright Business Recorder, 2007