NEW DELHI: After holding out for a week, cement manufacturers have agreed to hold the price line and not increase cement prices any further for one year with effect from Friday. However, they declined to roll back the prices which were increased immediately after the budget.

They also agreed to absorb all the additional costs for one year following prolonged deliberations with Commerce and Industry Minister Kamal Nath.

Cement manufacturers also agreed that if any concession was given to them in excise duty and other statutory levies, they would pass on the benefit to the consumer.

Reduction of cement and steel prices is crucial in the Government's scheme to dampen inflationary trends. But both sectors chose to ignore Union Finance Minister P. Chidambaram's appeal a day after presentation of the Union Budget to hold the price line and went the other way. On Tuesday (March 6), steel manufacturers fell in line by announcing an across-the-board cut in prices of most items.

On the other hand, cement manufacturers continued to argue that they were constrained to pass on the impact of higher excise duty entirely to consumers. They also referred to the increase in the cost of raw materials including the higher energy cost and transportation charges. In particular, they drew the government's attention to the higher price of coal required to be obtained by them from the open market.

At the meeting with cement manufacturers, Mr. Kamal Nath strongly urged the producers to reduce the cement prices which had risen significantly particularly after the budget which imposed an additional excise duty of Rs. 200 per tonne on cement costing more than Rs. 190 per bag.

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