COLOMBO, Sri Lanka – Sri Lanka’s Trade Minister, Nalin Fernando, has announced that the government is considering imposing price controls on cement. This move comes amid concerns over high building material costs, despite existing protectionist taxes on steel and tiles.
Minister Fernando stated, “We will announce a maximum retail price for cement once companies discuss this proposal.”
This announcement follows a recent price reduction of Rs. 150 per 50kg bag by cement companies, bringing the price down to Rs. 2,250. However, the Minister expressed dissatisfaction with this decrease, stating his preference for a maximum retail price between Rs. 2,000 and Rs. 2,500.
“The Consumer Affairs Authority can set a maximum retail price if companies do not comply,” Fernando added, “but I hope they will act in the best interests of consumers.”
The potential price controls on cement, a material largely produced with imported clinker, highlight the broader issue of high building material costs in Sri Lanka. The government’s current policy of imposing import restrictions on steel and tiles, with the intention of protecting domestic businesses, has resulted in artificially inflated prices.
This policy has been criticized by Colombo-based think-tank Advocata, which argues that import restrictions have led to the emergence of oligopolies within the building materials sector, fostering anti-competitive practices within the Sri Lankan market.
The government’s consideration of price controls on cement indicates a potential shift in its approach towards regulating building material costs. Whether this will extend to other materials like steel and tiles remains to be seen.