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Cement Sector Urges Government to Reconsider Axle Load Control Measures Amidst Projected $2 Billion Surge in Fuel Expenses

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The cement industry has issued a dire warning to the government, urging an immediate halt to the 100 percent axle load control regime on motorways and highways. They caution that failure to do so could result in an estimated $2 billion surge in fuel costs.

Addressing Caretaker Commerce Minister Gohar Ejaz, the All Pakistan Cement Manufacturer Association (APCMA) highlighted the potentially catastrophic impact of the axle load control regime on the economy.

Expressing concern, the APCMA emphasized that the implementation of the new axle load regime significantly diminishes the lifting capacity of trucks by 40 percent for 22-wheelers and a staggering 100 percent for 10-wheelers. This, they fear, will inevitably lead to a striking 50 to 60 percent escalation in freight costs, ultimately tallying up to a $2 billion surge in fuel expenditure.

The association underscored two critical ways in which export activities could be adversely affected:

  1. Inland freight costs for export goods will soar, rendering Pakistani exports less competitive in the global market.
  2. A substantial portion of exports relies on 20-foot containers, presently loaded with 28 tons per container. However, with the axle load restriction, these containers would carry only 14 tons, effectively doubling sea freights and rendering Pakistani exports financially unviable.

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The APCMA projected that the reduction in truck lifting capacity would result in a substantial increase of approximately $1.75 billion, representing 3.5 percent of total import costs. Moreover, it would lead to a twofold increase in freight expenses for both incoming raw materials and outgoing finished products. The implementation of the axle load control is anticipated to hike cement prices by Rs. 40 to Rs. 50 per bag.

In a proposed solution, the APCMA urged authorities to consider constructing a separate concrete lane on motorways and highways, funded through an incremental toll tax on trucks.

This plea from the association follows the recent government decision to enforce a 100 percent axle load control regime without relaxation starting from November 15, 2023.

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