ISLAMABAD, May 29: The government on Monday decided to continue with the policy of duty-free and subsidised cement imports in view of ‘failure of cement manufacturers to honour their commitments’.
This was stated by economic advisor Dr Ashfaq Hassan Khan after a meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Prime Minister Shaukat Aziz.
Mr Khan said it had now been established that the cement price hike was unjustified but said no punitive action was considered against them because the relevant summary had not proposed any action.
He said the ECC noted that “there was justification for increasing the price of cement in Pakistan because there was no increase in input prices, no increase in international cement prices and there was no extraordinary demand in the country”.
“Therefore, the increase in cement prices is totally unjustified,” said Dr Khan and added that prices had gone up to Rs400 per 50-kg per bag when the government last month had allowed duty-free import of cement on subsidised freight charges.
“The information effect of the April 14 decisions of the ECC has reduced cement prices to an average Rs300 per bag as of now, although not a single bag of cement has been imported as yet,” he said.
According to him, the cement import policy would be reviewed when the average retail price declined to Rs280-282 per bag and stabilised at that level. However, in reviewing this policy, all stakeholders would be consulted and in this process cement importers would have a big say, so that importers had already opened their letters of credit for import or imports in pipeline were not affected.
In response to a question, he said the ECC was unaware of the size of LCs opened for cement import because the State Bank of Pakistan had not been represented in the ECC meeting.
Mr Khan said the industries ministry informed the ECC that cement manufacturers had agreed to print Rs275 per bag ex-factory price on bags and stabilise retail prices at around Rs280-285, but they had not honoured their commitment.
He parried a number of questions on the cement situation and protection being provided to the manufacturers, saying such questions should be referred to the industries ministry as these issues were not discussed by the ECC.
SUGAR: Dr Khan said the ECC had not discussed the sugar situation at all because the issue was not on the agenda.
However, he said, about 1.2 million tons of sugar has so far been imported during the current year. This includes about 500,000 tons of import by the private sector and 700,000 tons by the Trading Corporation of Pakistan.
WHEAT: The economic advisor said the ECC had expressed satisfaction over the wheat procurement and appreciated the Sindh government for achieving its procurement target of 700,000 tons.
The wheat procurement by the Punjab government and Passco was also in progress with satisfactory pace and about 80 per cent of the target has been achieved by these two entities.
He said Punjab’s wheat procurement target was three million tons.
Dr Khan said the ECC had also approved in principle a standard security package for private power projects under the 2002 power policy that would avoid a separate documentation process for each power project and enable only the change of project names in model agreements.
He said no participant in the ECC meeting had dared to read the detailed document spread over more than 500 pages.
