Govt gives reasons for cement price hike in Pakistan

The Competition Commission of Pakistan (CCP) has released a comprehensive sector study into problems faced by Pakistan’s cement industry and how rising cement prices are not the result of supply and demand but driven by high taxes and poor government policies.

Taxes and duties claim nearly 38 percent of cement’s final price, keeping bags costly even as inflation drops. A 50-kg bag jumps from Rs822 to Rs1091 in just a few years, burdening builders and homeowners. Meanwhile, manufacturers boost production capacity from 45.6 million tons to 84.6 million tons.

Yet, they use only 53 percent of it due to weak demand. Pakistan’s per capita cement use lags behind global averages, leaving room for growth in housing and infrastructure. The report highlights market risks. Similar products, high entry barriers, and dominance by a few big firms limit competition, especially in southern regions.

Furthermore, a single coal import terminal creates monopolies, while varying provincial transport rules and royalties hike costs. Smuggled and fake cement from Iran threatens local makers and buyer safety. As a result, the commission urges bold reforms. End coal import monopolies, steady taxes, set fair energy prices, unify royalties, crack down on smuggling and fakes, build new factories, and modernize transport. These steps promise lower costs and fairer markets.

Without quick action, construction expenses soar, slowing homes and factories. The cement sector powers Pakistan’s economy, so fixes matter. Builders watch closely, hoping changes spark affordable projects and jobs.