ISLAMABAD, Aug 12: The Competition Commission of Pakistan (CCP) has raised objections over the new move of the ministry of industries and production to help fix the prices of cement as it amounted to promoting cartelisation.
Sources told Dawn on Tuesday that CCP Chairman Khalid Mirza has expressed his serious concern over the issue.
He plans to formally write a letter to the ministry asking it not to encourage cartels by helping to fix the prices of cement.
The CCP maintained that since every cement factory had different cost of production, why they were trying to fix the prices of their product and that, too, with the active support of the ministry of industries and production.
Mr Mirza has started meetings with chairmen of all the regulatory authorities asking them to refrain from fixing the prices of various utilities and products as it was “collusion” and meant to promote cartelisation in the country.
Initially, he held a meeting with acting chairman of Oil and Gas Regulatory Authority (Ogra) Rashid Farooq on Tuesday and discussed the issue with him. Sources said that Mr Farooq agreed with the CCP chairman that no regulatory authority or the ministry concerned has the right to fix the price of any product and that all should respect the competition law that discourages cartelisation.
The sources said that Mr Mirza told the acting Ogra chairman that the CCP was not a regulator and did not want to interfere in their affairs. However, he said that his job was to ensure prudent business practices in which various business organisations should not join hands to fix the price of any product.
It was also learnt that the CPP prima facie found the involvement of owners of CNG stations in promoting cartelisation by fixing the price of their gas. The CPP has sent a second set of questionnaire to the CNG owners and if they still did not come up with any plausible explanation, it would issue them a show-cause notice within this month.
The sources also said that the unprecedented rise in the prices of cement, steel and other construction material has started threatening the growth in the housing and construction industry that can also further increase unemployment in the country.
The sources said that the decisions made by the Engineering Development Board asking Pakistan Steel to index its prices according to “international landed prices” is putting pressure on the prices of steel.
“An impression is being created that the prices of Pakistan Steel are lower compared to prices in the international market, which is not true,” a source said. He also rejected the impression that high international prices are due to heavy consumption in China and mergers among big steel players.
The officials concerned concede that the unusual hike in the prices of construction material is threatening the job market in the industry. Daily-wage workers both skilled and unskilled are suffering since not only the construction activity in the private sector has slowed down but also large scale development projects in the public sector are also suffering as contractors are trying to find ways to minimise their losses.