The Department of Commerce, Supplies and Consumer Protection Management had given them until Monday to provide an explanation.

Manufacturers of building materials have failed to give a reason for the recent hike in the prices of their products. The government had given cement and iron rod producers until Monday to explain the price increase, but there has been no response from them.

Officials of the Department of Commerce, Supplies and Consumer Protection Management said they had not heard from the factory owners. Niraj Khatri, division official of the department, said they had not received any communication from them.

Last week, the department had summoned the manufacturers and asked them to provide a valid reason for the price increase following complaints from consumer rights activists that building materials had become dearer by 10-20 percent over a month.

Prem Lal Maharjan, president of the National Consumers Forum, said that construction activities intensify between mid-January and mid-June, and manufacturers routinely hike prices during this time of the year.

According to Rabi Singh, president of the Federation of Nepal Contractors Association of Nepal, the price of iron rods increased by Rs12 per kg over a month. “The price of iron rods swelled from Rs58-61 per kg in December to Rs69-74 per kg currently,” he said.

Singh said that prices of PPC cement and OPC cement, which used to cost Rs490-540 and Rs600-680 per sack respectively, had bloated by Rs20-30 per sack. “It is clear that cement factories have formed a cartel and raised the prices without any basis,” said Singh.

Iron rod manufacturers justified the higher prices saying that they were paying more for the billets, the raw material for the production of iron and steel rods. But Maharjan and Singh both said that the price of billets had not increased on the international market.

Dhurba Thapa, president of the Cement Manufacturers Association of Nepal, said that cement prices were within the normal range. "They may have increased nominally due to an increase in the price of charcoal on the international market, but that is normal," he added.

Hiking prices arbitrarily violates the Consumer Protection Act 2018, said Maharjan. "Manufacturers are required to obtain permission from the government before raising the price. The recent hike in the prices of cement and iron rods is an artificial increment," he added.

Manufacturers of construction materials increase the price annually during this time. They take advantage of lack of government inspection and price controls, and consumers get hit, he said.

Netra Prasad Subedi, director general of the Department of Commerce, Supplies and Consumer Protection Management, said that they had given the manufacturers a week's time to submit a reason for the price increase.

“If we find that they have no valid reason to raise the price, we will take action against them,” he said.

There has been no proper and effective market inspection since Subedi joined the department for lack of a work plan, and this has led to a rise in the overall market price.

Around two months ago, the prices of construction materials such as cement, iron rod, gravel, brick and sand had plunged by 30-40 percent which traders attributed to a slowdown in Indian economy.

source: the kathmandu post, 28 Jan 2020