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Price Control Of Imported Cement

What is Price Control? Price controls are government-mandated legal minimum or maximum prices set for specified goods, usually implemented as a means of direct economic intervention to manage the affordability
03 Jul 2017 10:00
Price Control Of Imported Cement
Cement

What is Price Control?

Price controls are government-mandated legal minimum or maximum prices set for specified goods, usually implemented as a means of direct economic intervention to manage the affordability of certain goods.

One of the reasons that governments invoke price controls is to ensure that goods and services are sold at a ‘fair’ price.

 

Why Price Control for Cement?

Cement is a critical ingredient in the manufacturing of concrete and other products.

It represents a basic ingredient towards infrastructure construction, which is essential for growing virtually all the sectors thus adding to higher levels of economic growth.

In addition, it represents a basic social stratum in terms of housing needs and sanitation.

It is essential for the establishment of transport corridors, gateways, airports, seaports and networks needed for regional integration and customs facilitation.

A good infrastructure network facilitates trade among countries and can represent the springboard for growth and development.

The cement industry has great significance to the achievement of national socio-economic development goals of providing infrastructure, sanctuary and employment.

It deals with all economic activities directed to the creation, renovation, repair or extension of fixed assets in the form of buildings and land improvements of an engineering nature.

Besides, the industry generates substantial employment and provides a growth impetus to other sectors through backward and forward linkages.

It is essential that, this vital activity is nurtured for the healthy growth of the economy.

Given the fact that cement represents a basic tenet of substantial infrastructure investment and having its broad impact on the economy.

It is important that cement is made available on a broader choice basis and with fair pricing.

This can only be done if there is fair and just competition in the cement market.

The prices that are evident in the cement market should represent both the price affordability and broader choice of cement.

The construction sector is dependent on cement for construction activities around the country.

Construction activities are considered to be one of the major sources of economic growth, development and economic activities.

Construction and engineering services industry play an important role in the economic uplift and development of the country.

It can be regarded as a mechanism of generating the employment and offering job opportunities to millions of unskilled, semi-skilled and skilled work force locally and globally.

It also plays key role in generating income in both formal and informal sector.

It supplements the foreign exchange earnings derived from trade in construction material and engineering services.

 

Price Control on Supply of Cement Products under the Commerce Commerce Act 2010

On 9 June 2017, the Government has announced that cement can now be imported from overseas with a zero rated duty on importation.

This comes in response to a breakdown of machineries at the country’s main cement manufacturer, the Pacific Cement Limited at Lami which led to the shortage of cement supply.

Importation of cement has opened up as long as importers meet importation standards.

There is a duty reduction on the importation of cement from overseas, however, this does not mean that they will be able to contest the local retail price as price will be controlled by the Commission.

Pursuant to section 39 of the Commerce Commission Act (CCA) 2010, the supply of cement products in all quantities, qualities, grades and classes in Fiji are controlled at the Ex-factory, Wholesale and Retail functional levels.

This is enforced under the Commerce (Control of Prices for Cement Products) Order 2015.

As a consequence, the Prices for imported cement into Fiji is subject to Section 41 (1) CCA 2010, which prohibits the supply of controlled imported cement unless a price has been authorised by the Commission and supplied in accordance with the authorisation.

It is mandatory for the traders importing cement to furnish the costing documents to the Commission and get authorized prices for imported cement in accordance with the authorisation.

Feedback:  selita.bolanavanua@fijisun.com.fj

 

 

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