WHY DOES CEMENT PRICES GO UP?
Today, a plenty of new apartment houses and other buildings are being constructed in all nook of the Republic. So, the need for construction materials including cement has increased as well.
According to the Ministry of Economic Development, cement prices began to go up parallel with increase its production volume in 2000.
The cement price jump took place in June-July this year that aroused fair discontent of the consumers. In this connection, Antimonopoly Department of the Ministry of Economic Development has conducted a monitoring, which showed that the sudden rise in prices had been fostered and realized by a group of persons by creating closed sale markets with limited number of distributors.
Despite monthly demand in cement in the country is 150-160 thousand tons, which usually grows in summer - in June, “Garadag-cement” reduced the volume of production by 30% “because of” lack of raw material - “clinker” e.g. cement production reduced from 112 thousand tons in May up to 74 thousand tons in June.
Investigation showed that the JSC “Garadag-cement” abusing its monopoly in cement market and contrary to legislation, has limited free sale of cement produced causing, thus, artificial shortage and rush among consumers.
Beginning from June - the moment of artificial shortage creation at cement market - the delivery of cement to those distributors who had been constantly functioning in the cement market, has reduced 2-3-fold, while major part of the daily produced cement had been supplying to the distributor just recently appeared in the market, who in its turn, began to sale cement on new terms and conditions.
After rise in cement prices, to avoid responsibility and step aside from the situation, management of the JSC “Garadag-cement” officially informed relevant bodies that the plant sells a sack of cement for 15-15.5 thousand manats (300-310 thousand manats per ton), and that the prices are allegedly raised those who sells it retail. At the same time, the proposals to cancel the closed sale and announce a tender, as well as to make deals with new distributors offering lowest price limit, and ensure transparency of cement sale have been unambiguously rejected by the “Garadag-cement”.
While conducting check-up, the Antimonopoly Department revealed as well that many retail dealers bought cement from distributors without appropriate documentation, and price indicated in the invoices was much lower than the original price.
Non-distribution of invoice to the VAT paying retail objects along with the abovementioned facts creates the probability of tax evasion.
It was also identified in the course of the check-up that while closing certain deals, the requirements of antimonopoly legislation had also roughly violated by the “Garadag-cement”.
Since this year, the “Garadag-cement” - the country’s only cement producer – has used ecologically harmful polypropylene sacks for cement packaging.
The facts revealed have resulted in jump in cement prices arousing consumers’ discontent.
The Antimonopoly Department of the Ministry of Economic Development is now continuing its work on taking relevant measures for complete solution of these problems.