Cement prices surge by Rs201 per bag in a year

Cement prices surge by Rs201 per bag in a year

Cement prices in Pakistan have climbed by as much as Rs201 per 50kg bag over the past year, adding to construction costs and making home ownership increasingly difficult for ordinary citizens, according to official data.

The Pakistan Bureau of Statistics (PBS) reported that the average price of a 50kg cement bag reached Rs1,596 in the week ending October 8, compared with Rs1,395 in the corresponding week last year. The increase of Rs201 represents a year-on-year rise of 14.38 per cent.

Topline Securities reported on Thursday that cement prices rose by Rs100 to Rs150 per bag during the first quarter of fiscal year 2026-27 compared with the same period last year, largely due to higher fuel costs, particularly international coal and diesel prices.

According to Adeel Ashraf of Topline Securities, Richards Bay coal prices averaged $113.93 per tonne in the first quarter of FY27, against $113.20 in the previous quarter and $90.30 in the same quarter last year.

Industry sources said coal prices had increased by around $20 per tonne year-on-year. Including freight charges, the average cost reached $133 per tonne in the first quarter of FY27, up from $113 a year earlier.

The increase in coal costs added at least Rs20 to the production cost of each cement bag, while higher diesel prices contributed approximately Rs15 more per bag, the sources estimated.

However, industry sources argued that manufacturers had raised prices beyond the increase justified by higher input costs, widening their profit margins. They maintained that an increase of Rs50 to Rs70 per bag would have been sufficient to cover the additional coal and diesel expenses.

The continued rise in cement prices has also raised concerns about housing affordability. Sources said property investors continued to support demand for housing projects, while high construction costs kept houses and apartments beyond the reach of many ordinary buyers.

They also criticised regulatory authorities for failing to address alleged cartelisation in the cement industry. According to the sources, the Competition Appellate Tribunal has yet to decide a case dating back to 2008 involving allegations of cement cartelisation, leaving the matter unresolved for 18 years.