Cement companies get two-week stay from Supreme Court

June 25, 2025 (MLN): The Supreme Court has granted a two-week stay to cement manufacturers, temporarily halting the enforcement of a recent ruling that mandated higher royalty payments on limestone.

Earlier, a larger bench of the Lahore High Court had ruled against cement producers in a high-stakes case, directing them to pay royalties based on 6% of the ex-factory price of cement or clinker.

This marked a shift from the previous flat rate of Rs250 per ton, which was revised by the Punjab government on August 2, 2024, as part of its broader revenue-raising efforts.

The industry mounted a legal challenge, initially securing a temporary stay from the Lahore High Court by furnishing bank guarantees.

However, that protection was lifted following the High Court’s latest judgment, prompting manufacturers to turn to the Supreme Court for relief.

The legal uncertainty comes at a difficult time for the sector, which is already facing subdued construction activity, high energy costs, and elevated borrowing rates.

If upheld, the revised royalty formula could further compress margins, especially for firms heavily invested in Punjab-based operations.

Industry sources indicate that companies are preparing to contest the case in full during the next Supreme Court hearing, as they seek to overturn what they view as a burdensome and disproportionate levy.

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