Amid allegations that cement manufacturers are forming a cartel to artificially inflate prices, a cement industry representative has warned during a parliamentary committee meeting that prices may rise even further.

In recent months, cement and rebar manufacturers have increased prices, prompting accusations from construction businesses that producers are deliberately reducing supply to drive up costs. However, former president of the Nepal Cement Manufacturers’ Association, Dhruva Thapa, stated that the ongoing power outages in industrial zones could push prices even higher.

Since March 16, India has restricted electricity exports to Nepal to daytime hours only, raising concerns that the Nepal Electricity Authority (NEA) may implement load shedding in industrial areas. Last year, Nepal faced up to 12 hours of power cuts in industrial zones due to India's refusal to supply electricity. While Nepal generates surplus electricity during the monsoon, it must import power from India during the winter to meet the domestic demand.

“The price could rise further. If industries have to run on diesel due to load shedding, the cost per bag of cement could increase by Rs 60 to 70,” Thapa stated. “At present, no industry is in a position to operate smoothly.”

According to construction business representatives, cement prices have nearly doubled since the beginning of the current fiscal year. Ravi Singh, president of the Federation of Contractors’ Associations of Nepal, said that last July–August, factory gate prices for OPC cement ranged from Rs 400 to 500 per bag, depending on the location. Now, prices have surged to Rs 760 per bag.

“Rebar prices have also surged in the past two to three weeks, rising from Rs 76 per kg (excluding VAT) to Rs 95 per kg. Prices are being increased continuously over short intervals,” Singh stated. “This price hike is being orchestrated through collusion among manufacturers,” he added while speaking at the Industry, Commerce, Labour, and Consumer Welfare Committee of the House of Representatives.

“Despite manufacturers deliberately reducing production to create an artificial shortage and raise prices, the government remains a silent spectator,” he remarked. Singh demanded that the government take immediate and strict measures to reverse the price hikes, arguing that a lack of regulatory action has encouraged manufacturers to increase prices unchecked.

In response, Thapa defended the cement industry, stating that manufacturers are currently selling cement at a loss of Rs 150 per bag and cannot sustain operations under such conditions.

“The current shortage of electricity, rising diesel costs, and additional challenges in under-construction industries are all increasing production costs, which may lead to further price hikes,” he explained.

Following Thapa’s statement that cement prices could rise further, several lawmakers raised strong objection. They emphasized that they never asked cement manufacturers to sell at a loss but urged them not to threaten price hike. Instead, they called for a solution-oriented approach.

Rastriya Swatantra Party (RSP) lawmaker Dol Prasad Aryal called for a scientific study to determine the actual reasons behind the price hikes. “The focus should not be on raising prices but on identifying the causes. The government must be proactive in consumer protection,” he asserted.

Similarly, lawmaker Mahendra Bahadur Shahi warned that rising construction costs could negatively impact major infrastructure projects and urged the Ministry of Industry to take a proactive role. He cautioned that factory closures and ongoing price hikes could severely harm the economy, necessitating policy-level interventions.

Committee member Rama Koirala Poudel questioned whether the meeting was convened by the committee chairperson or the business community itself. “The claims of cement manufacturers are unacceptable. Their threats are not acceptable,” she remarked.

Lawmaker Lal Prasad Sawa Limbu called for an investigation into whether taxes and raw material costs have increased.

Meanwhile, Minister for Industry, Commerce, and Supplies Damodar Bhandari stated that if any manufacturers had raised prices beyond the agreed limit, the government was prepared to take action. He revealed that a prior agreement between construction businesses and cement manufacturers had capped price hikes at Rs 115 per bag.

Minister Bhandari also informed that the ministry has formed a task force to study cement production costs and pricing. “The task force will present a factual report on cement production costs within seven to ten days,” he stated. “The government's priority is to resolve policy complications, but market forces ultimately determine product prices.”