Lahore: Cement prices in Pakistan have seen a significant increase in recent months, mainly due to the imposition of new taxes and falling demand at the local level.
By July 2024, the retail price of a 50kg bag of cement had risen to between Rs 1,450 and Rs 1,500, with the highest prices reported in cities such as Lahore and Peshawar. During the last six months, these prices were between Rs 1,300 and Rs 1,330, which is a significant increase compared to then.
Different brands have revised their prices: Bestway Cement is selling at Rs 1550 to Rs 1600, Lucky Cement at Rs 1540 to Rs 1550, DG Khan Cement at Rs 1510 to Rs 1550, Fauji Cement at Rs 1450 to Rs 1560, and Maple Leaf Cement at Rs 1500 to Rs 1510.
The increase comes in the wake of the federal government increasing the federal excise duty (FED) on cement from Rs 2 to Rs 4 per kg in the 2024-25 budget.
According to the All Pakistan Cement Manufacturers Association (APCMA), in July 2024, local cement remittances recorded a decline of 6.81 percent compared to the same month last year, while local remittances saw a decline of 11.41 percent and exports increased by 21.65 percent.
A spokesperson of the association has said that high taxes and rising production costs are adversely affecting the cement sector. He has requested the government to review the tax policies so that the problems faced by this important industry can be reduced.
In Punjab, the provincial government has imposed a 6% royalty on the factory price of cement or clinker from July 1, 2024, which will increase the prices by about Rs 50 per bag. Some cement companies have obtained a stay order from the court against this decision, but despite this, the prices of cement in Punjab are expected to increase by up to Rs 75 per bag.
The cement industry is facing severe challenges in the presence of high taxes and declining demand. Although there has been some relief from the increase in exports, the sector expects the government to relax policies. To ensure sustainability and growth of the industry.
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