KATHMANDU, April 27: Cement and iron rod manufacturers have hiked the prices of their products citing short supply of electricity at their production plants.
The manufacturers are reported to have raised the price of cement by Rs 20 per sack, while increasing the price of iron rod by Rs 3 per kg. At the revised rates, cement costs more than Rs 770 per sack while iron rod costs around Rs 90 per kg on an average.
Rabi Singh, president of the Federation of Contractors’ Association of Nepal, said the manufacturers have curtailed the supply in order to increase the price of their products. According to him, the manufacturers have created artificial shortages under a cartel.
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The controversial price hikes of the construction materials have time and again in the past few months have raised concerns among various government bodies and the construction entrepreneurs. Earlier, cement manufacturers increased the price of their product by around Rs 150 per sack, while the price of iron rod was also increased by around Rs 15 per kg.
Following the excessive price hike, the Public Accounts Committee (PAC) inquired multiple times on the possible black-marketing of cement and iron rods. Likewise, the Department of Commerce, Supply and Consumer Protection has even made it mandatory to mention the maximum retail price (MRP) on iron rods and cement since the beginning of the Nepali New Year 2082. In addition, the department also directed manufacturers to ensure proper labeling, including MRP, manufacturers’ names, batch numbers, and expiry dates.
In response, the manufacturers consented to mention the factory gate price while selling their products in the local market. Following the government interventions, the industrialists even lowered cement and iron rod prices on the excuse of reduction in production costs due to reduced power cuts in industrial areas.
The manufacturers now claim that they are compelled to operate their production plants at less than 50 percent capacity just after the Nepal Electricity Authority (NEA) recently made public about its struggle to maintain power supply. Issuing a public notice on Wednesday, the NEA clarified that the peak time electricity production in the country has gone down to 1,593 MW, while the demand stands at 2,077 MW. The shortfall amount of the energy is being fulfilled through imports from India.
However, the state-owned power monopoly has admitted that it has been unable to buy adequate electricity from the Indian Exchange Market due to surge in demand for electricity at the local level in the southern neighbor. The NEA, despite its pledge, has expressed its inability to maintain smooth supply to the manufacturing sector in particular.
