ISLAMABAD, Aug 8: The government on Friday failed to convince the cement manufacturers to reduce cement prices despite a 25 per cent relief it provided in the form of reduced duties.
The cement manufacturers, sources told , were not flexible and told the government side to try to learn about the mechanism of cost calculation instead of making political statements.
This was the outcome of a meeting presided over by secretary, industries and production Javed Ashraf and attended by All Pakistan Cement Manufacturers Association (APCMA) led by its chairman Tariq Sayeed. The chairman of government owned State Cement also attended the meeting although he was not part of the cement cartel.
A representative of the cement industry, who preferred not to be identified, said the secretary industries was unfamiliar with the whole subject and could not justify the proposed price reduction when told that current cement price was lower than October 2002 period.
It was in this background that two sides agreed to come up with their respective production cost calculations in another meeting on August 13 for analysis and further discussions, he said.
A government official said if the cement industry remained stick to its position and did not reduce the price, the government was in a position to reactivate the Mustehkum and Rohri cement, two closed plants of the State Cement, or allow import of cement.
He ruled out disconnection of gas supply to cement plants as speculated in some quarters saying the closure of mills would further aggravate the situation.
The cement industry has developed a cartel-like situation for about a month and has increased product price from around Rs180 per bag to Rs230 at present.
The government team was informed by the APCMA that cement export to neighbouring Afghanistan was limited and their capacity utilisation was also very low, resulting in the higher price.
They said cement prices had drastically dropped after October last year because of a competition among various millers due to higher production that had taken place in anticipation of exports to Afghanistan, although did not materialise.
The secretary industries told the APCMA that they had increased cement prices to an unreasonable level and it was desire of the prime minister to reduce prices particularly in view of the fact that it had reduced duty on cement by 25 per cent in the budget. When contacted, secretary industries Javed Ashraf declined to comment on the subject and said an official statement would be issued about the meeting. However, no official statement was released.