Cement prices in Nepal have increased by up to Rs 22 per sack after the government revised the excise duty rate through the new Finance Bill, 2082. The hike comes amid ongoing allegations that cement producers have been colluding to inflate prices, raising concerns about rising costs in both public infrastructure and private construction projects.

Previously, the government levied a fixed excise duty of Rs 11 per sack for cement. However, the new Finance Bill has revised this to 5% of the retail price per sack. In response, cement manufacturers have increased prices by Rs 20 to Rs 22 per sack.

Cement producers have been raising prices since mid-December, citing factors such as reduced market demand, and operational losses. The latest price hike, however, coincides with peak construction season, further exacerbating the cost burden on ongoing projects.

Raghunandan Maru, President of the Cement Manufacturers Association of Nepal, confirmed that the price hike was triggered by the government’s change in the excise duty structure. According to him, the increased tax has directly contributed to the rise in cement prices.

“The new excise duty does not apply to cement that was produced and stored as of May 29,” Maru said. “However, older stock will last no more than 15 days, after which the revised rates will apply to newly produced cement.”

With the ongoing construction season expected to last until June end, demand for cement remains high. In contrast, the period from mid-July to the Dashain-Tihar festival season is considered off-season for infrastructure projects.

Cement producer Dhruba Thapa also confirmed the price increase, noting that the hike had already taken effect even before the excise duty revision was officially announced. “Although there had been no formal discussion, the increase in excise duty inevitably affects consumers,” he said.

Rabi Singh, President of the Federation of Contractors’ Associations of Nepal, expressed concern over the cumulative effect of the price hike. “Cement producers were already increasing prices through cartelisation,” he said. “The government’s move to raise the excise duty at the same time adds further cost pressure on the construction industry.”