LAHORE - The increase in duty on import of coal has adversely hit the local manufacturers, especially cement sector, which is consuming over 95 percent of the total imported coal, and has drastically increased cost of doing business.

The government, on one hand, is encouraging coal based power generation but on the other hand it is escalating cost for the cement industry which has already been converted to coal by spending billions of rupees. Instead of providing incentives to the cement industry, which is consuming over 95 percent of the total imported coal, the government has created trouble for it by imposing discriminatory tax on imported coal.

The cement sector representatives have asked the authorities to withdraw import duty on coal, as it is injustice to the cement sector which is running its plants mostly on imported coal. The cement industry has spent millions of dollars in converting its plants from the expensive furnace oil to coal in order to produce cheaper cement for the consumers of Pakistan as well as making cement prices competitive in global markets.

“Our all efforts to reduce production cost faded away when the government imposed import duty on the cement industry’s main source of fuel, reducing our competitive advantage significantly,” they lamented. They added that the duty on imported coal is reversing the positive initiative of the government to use coal as an alternate energy source, as several industries, including cement sector, has switched to coal and many others are also converting to coal due to unavailability of gas. The cement sector of the country is already facing many issues, including increasing royalty on mining, shortage of labour, low exports and losses on coal imports in absence of freight subsidy, therefore, this duty is just to add to the sector’s woes.

The imposition of duty along with landed cost of coal, transportation cost to the up country, and increase in cost of doing business, could also result in the increase of cement prices. They urged the government to remove this discriminatory anomaly and restore zero taxation on the main fuel of the cement industry.