Laxmi Capital News
Cement factories told to roll back price hike within three days

The government hasdirected cement factories to roll back the decision to increase the price ofcement within three days. 

The decision comesin the wake of as much as 16 percent increment in the price cement - a keyconstruction material - in recent weeks.

A survey conductedby the Department of Supply Management and Protection of Consumers Interest(DSMPCI), the agency for market monitoring and consumer protection, inKathmandu and some major cities of the country in the past two weeks showedthat price of cement has gone up by 10 to 16 percent, while factory input costhas increased by only 7 to 9 percent. 

“This is the caseof the artificial price hike. That is why we have asked cement manufacturers toroll back the price hike decision within three days,” Laxman Shrestha, directorof the department told Republica. “We have issued a direction in the name ofNepal Cement Manufacturers' Association, asking them to circulate the decisionto all their members and implement the decision within three days.” 

The department hadheld a discussion on the issue with office-bearers of the association onMonday. 

“We found anominal rise in the price of raw materials and transportation cost. But theprice hike is very high,” said Shrestha. 

Shrestha furtheradded that the government would take needful action if cement factories do notimplement its decision. He explained that the government will charge themanufactures of imposing a market cartel if the price of the cement is notbrought down within three days.

Not only cement.Price of other construction materials like a steel rod, sand and aggregate havealso increased in recent weeks. But the government has not market prices ofthese construction materials.

The rise in theprice of construction materials has affected victims of the 2015 earthquakes asmost of them are rebuilding their homes. Factories hiked the price to cash inon the rise in demand for construction materials.

Two weeks ago, civilconstruction contractors had flayed the price hike in construction materials,blaming cement factories and steel factories of working in collusion to imposea cartel. The contractors had claimed that price of cement and steel rodincreased by 12 and 7 percent to Rs 910 (for a sack of 50 kg) and Rs 85 per kgsteel, respectively. 

The price of sandand aggregate has also increased significantly. But the government has nottaken the issue seriously. 

Federation ofContractors' Association Nepal, a fortnight ago, indirectly blamed thegovernment for creating an environment for price syndication, stating that ithas not allowed crusher industries to operate, citing a separate regulation tooperate. “This affected supply in the market, causing the price to go up,”officials of the federation had said in a press meet two weeks ago.

Source: MyRepublica, 23rd January 2018

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