Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Private cement producers in Nepal have been accused of engaging in cartelization to artificially increase cement prices, adversely affecting the construction sector.
Ravi Singh, President of the Federation of Contractors’ Associations of Nepal (FCAN), expressed concern over the inability of contractors to purchase cement at the inflated prices. “On one hand, payments for completed work remain pending, and on the other hand, rising cement prices are forcing contractors to consider halting construction projects,” he stated.
Singh alleged that cement producers have intentionally reduced production, creating artificial shortages rather than responding to increased market demand. “Currently, there is cartelization among cement producers to reduce production by up to 40%, creating an artificial shortage,” he claimed. “This is nothing more than an attempt to exploit the situation.”
As a result, many contractors have stopped purchasing cement at the increased prices, Singh added.
However, cement producers argue that they are correcting past practices of unhealthy competition, where cement was sold below production costs.
According to contractors, the price of cement has surged to an average of NPR 710 to NPR 795 per bag, compared to the previous range of NPR 500 to NPR 600 per bag. Prices differ between PPC and OPC cement.
The rising cement prices during the government’s peak capital expenditure season have drawn the attention of the Department of Commerce, Supplies, and Consumer Protection.
The department held discussions with cement producers on Sunday, demanding price lists and justification for the price hike within seven days. Rajan Paudel, Director General of the department, confirmed that producers have been asked to provide clarity and submit their pricing details.
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