March 28, 2008	Friday	Rabi-ul-Awwal 19, 1429

KARACHI, March 27: The powerful cartel of cement makers continues to cash the rising demand as they have further increased the rate of 50 kg bag by Rs5-10 on Thursday.

The new retail prices of Falcon, Pakland and DG Khan Cement are now tagged at Rs280-285 depending on the profit of retailers. The price of Lucky Cement now hovers between Rs260-270 per 50 kg bag.

In absence of any check on rising cement prices and the lethargic attitude of the Competition Commission of Pakistan (CCP), the cement makers are looking forward to push up the rate to Rs300 per bag

Shaukat Hussain, a cement dealer in Gulshan-e-Iqbal, said that the maker of Falcon Cement has increased the rate to Rs273 from Rs262 on Thursday while it was Rs257.50 last week. He said that the retailers, at least, charge Rs10 per 50 kg bag. Currently, 7,000-8,000 tons cement is being sold daily in Karachi.

However, according to an analyst at Jehangir Siddiqui this increase in cement prices is also due to rising input costs forcing the cement companies to get into a price arrangement and pass the impact on the consumers. Cement price will go up further in coming days.

On the cost side, the JS analyst said that the industry sources had informed that the coal rates have declined over the last week. According to the Reuters McCloskey Coal Index (C&F), the index fell from $143 per ton to $138 per ton as all major commodities witnessed a mini correction.

A further decline in coal prices can reduce some pressure on the margins of the cement companies.

Karachi Cement Dealers Action Committee President Wali Bhai Patel said that the cement prices had surged by Rs50 in just one month.

He said that the cement makers were using the rising cost of oil as a pretext for pushing up the rates.

However, majority of the cement companies now run on coal instead of furnace oil.

When there was 18 per cent general sales tax and the excise duty was Rs1,000 per ton, then the cement bag (50 kg) was available at Rs200. And now when the sales tax is 15 per cent and the excise duty is Rs750 per ton, the cement bag is selling at Rs280, he said.

The cost of production of cement makers comes to Rs150 per 50 kg bag but they have been playing havoc with the prices, he said.

In the previous government, the Monopoly Control Authority (MCA) had conducted an

inquiry into rising cement prices but the finding of the report of the MCA had not been made public.

Mr Patel urged the new government to take steps in forcing the cement makers to reduce the rate and take action against those companies, which do not reduce prices.