The Department of Commerce, Supplies, and Consumer Protection (DoCSCP) has expressed concern over the steep rise in the prices of iron rods and cement, calling manufacturers and sellers of these materials for discussions.
Cement manufacturers recently increased prices by as much as Rs 100 per sack. As a result, the market price of PPC cement now ranges from Rs 600 to Rs 650 per sack, while OPC cement costs between Rs 700 and Rs 750 per sack. Manufacturers have attributed the price hike to losses in their cement businesses.
Similarly, the price of iron rods has surged by up to Rs 15 per kilogram. According to traders, iron rods now average Rs 110 per kg, up from Rs 96 per kg just two weeks ago.
Concerns of Cartelization
Contractors have accused manufacturers of cartelizing to exploit the peak construction season. “The manufacturers have not only raised prices but also reduced supply in the market,” said Roshan Dahal, General Secretary of the Federation of Contractors’ Associations of Nepal.
Manufacturers’ Defense
Manufacturers argue that the price adjustments were unavoidable due to increased production costs, claiming that cement and iron rod prices had remained unchanged for six years.
Government’s Response
Rajan Poudel, Director General of the DoCSCP, acknowledged the growing complaints about the excessive price hikes. “We are investigating the underlying causes and will determine appropriate actions after discussions with stakeholders on Sunday,” he stated.
Impacts on the Construction Sector
The price surge comes at a time when the construction sector is already facing a slowdown. Contractors cite delayed government capital expenditure, late payments for completed works, and power supply disruptions as key challenges.
The National Statistics Office (NSO) has projected the sector’s growth rate to decline by 2.07 percent in the current fiscal year, a sharp drop from 7 percent in 2022/23 and negative 1.1 percent in 2023/24.
Further complicating the situation, Nepal Rastra Bank reports a mere 2.5 percent growth in private sector lending by commercial banks in the first three months of the current fiscal year, with construction loans growing by only 2.2 percent.
