November 21, 2008

Oman considering duty reduction on steel and cement

Oman Times reported that Mr Khalil bin Abdullah Al Khonji chairman of Oman Chamber of Commerce & Industry held a meeting with the private sector companies and establishments from the construction sector in the presence of contractors within the context of a series of initiatives taken by the chamber to discuss inflation in various sectors.

Mr Khonji said that Oman is considering reducing import duty on building materials in an effort to put a cap on rising inflation in the construction sector. He said "We are revising the import duty on building materials to help reduce the cost of cement, steel and wood."

However Mr Khonji did not say to what level the import duty would be reduced. Oman's import duties range from 5% to 15%.

The traders also mooted the idea of collective import of building materials from overseas markets, instead of imports by individual companies. This will not only reduce the cost of import but also enhance supply of building materials within the country.

Another proposal was on relaxing technical and engineering specifications on building construction. OCCI said "These specifications, in many cases, lead to additional use of materials. New mechanism to distribute building materials, especially iron and cement, will ensure uninterrupted supply in interior regions.”

Cement and steel prices have been soaring in the recent past and touched an all-time high.

Oman had restricted the import of cement two years ago to support the sale of local firms Oman Cement Co and Raysut Cement Co but the move caused shortage in the market. Mr Al Barwany chairman of Al Barwany Construction said Oman needed an extra 20,000 tonnes per day of cement to help reduce the shortage.