Other than the health sector, the other most affected thing with the inception of 2020 was the economy. When Covid-19 crisis hit the world, goods and services started to lose their prices and value. For months things remained stagnated and kept hanging in oblivion. As soon as a bit of economic activity started returning to normal prices began to hike.
But why is it different for Pakistan?
Pakistan is a third world country with an already struggling economy. Even though it survived the pandemic better than expected still it suffered a heavy blow to its economy. Just like other services, the cement industry too took the toll of economic instability. There was a lockdown and not many construction projects were on going. Therefore cement prices dropped down and soon after lockdown ended, it returned to the previous figure.
For Pakistan it was already difficult, because inflation was on continued rise even long before this pandemic hit the world. So a slight increase in any good, it’s taken with awe and surprise as it’s regarded as part of supposed continuity of inflation trends in the country. However, hike in cement prices was not the consequence of the existing pattern, rather it was just raised in the northern part of the country. That raise was just returning to the normal price that was in place before the crisis.
Why did Cement Prices rise occur in the north but not south?
Southern part of Pakistan is already selling cement at higher prices which is 650 per bag as compared to 505/525 in the Northern side including Punjab at current rate. So even after a so-called hike, it was a lot less than the south.
Are there any incentives offered by the government for relief?
Government has reduced the federal excise duty from Rs.2 per kg to Rs. 1.5 on each bag. It was expected it would decrease Rs. 25 from per bag price. But cement dealers have declined from doing so because product costs are heavy and no subsidy is being offered. Government is offering tax exemptions for builders and construction companies also eliminating withholding tax from construction materials other than cement and steel. Therefore the cement industry is justified in its demands of keeping the raised prices intact. Carvan cement amid all these upheavals remained committed to providing it’s customers best quality products at best possible reasonable pricing.
