KARACHI: Construction costs have risen as cement manufacturers have increased prices by up to Rs201 per 50kg bag over the past year, according to official data released by the Pakistan Bureau of Statistics (PBS).
According to the weekly Sensitive Price Index (SPI) for the week ending Oct 8, the average price of a 50kg cement bag stood at Rs1,596, compared with Rs1,395 in the week ended Oct 9, 2025, representing a year-on-year increase of 14.38 per cent.
However, Topline Securities said in a report on Thursday that cement prices had increased by Rs100-150 per 50kg bag during the first quarter of FY27 compared with the same period last year, mainly due to higher fuel costs amid elevated international coal and diesel prices.
Market sources said cement prices in Punjab were higher than those in Karachi.
Higher international coal and diesel rates have contributed to rising production costs
Adeel Ashraf of Topline Securities said Richards Bay coal prices averaged around $113.93 per tonne in 1QFY27, compared with $113.20 in 4QFY26 and $90.30 in 1QFY26.
Sources said average coal prices had increased by around $20 per tonne on a year-on-year basis. Including freight charges, the average cost stood at $133 per tonne in 1QFY27, compared with $113 in the same quarter of the previous fiscal year.
They estimated that the $20-per-tonne increase in coal costs translated into an additional cost of at least Rs20 per cement bag, while higher diesel prices added around Rs15 per bag.
Despite these cost increases, sources said the overall increase in cement prices had widened manufacturers’ margins, potentially generating substantially higher profits in FY27.
They warned that rising cement prices would further hurt ordinary citizens already struggling to afford expensive homes and flats. According to the sources, property investors continued to drive demand for housing projects, while houses and apartments remained beyond the reach of many ordinary buyers.
The sources said cement manufacturers should have increased prices by only Rs50-70 per bag in response to rising coal and diesel costs.
They also criticised regulatory authorities for failing to address the issue effectively. They said the Competition Appellate Tribunal had yet to decide a 2008 case involving alleged cement cartelisation, even after 18 years.
Mr Ashraf said the listed cement sector was expected to post a combined profit of Rs32.4 billion in 1QFY27, compared with Rs27.8bn in 1QFY26, representing an increase of 16pc year-on-year and 16pc quarter-on-quarter. The year-on-year growth in earnings was primarily attributable to higher net sales amid increased retention prices.
Net sales were projected to reach Rs143bn in 1QFY27, up 25pc year-on-year and 14pc quarter-on-quarter, driven by higher cement prices and growth in domestic dispatches. Local cement dispatches increased by 8pc year-on-year in 1QFY27, while export dispatches declined by 11pc. On a quarter-on-quarter basis, domestic cement dispatches rose by 9pc on the back of stronger demand, while export dispatches increased by 10pc.
Published in Dawn, October 11th, 2026
