During May this year, the cement prices were hovering over Rs 90 per bag in the local market.

According to sources, Naidu had asked the officials to get in touch with the cement manufacturers associations and convene a meeting with them. Naidu is expected to meet the cement producers on October 29, after he returns from his Japan and China trip, said the sources.

Though the cement manufacturers in the state are not in a mood to bring down the prices, they argue that the prices in neighboring states like Tamil Nadu and Karnataka are much higher. "More over, the cement supplied to the state government is costing about Rs 115 per bag," said the industry sources.

It is understood that, the chief minister was apprised by his cabinet colleagues at the recent meeting about the sharp rise in the cement prices and expressed that it might be due to the nexus in the organised sector. Further, Naidu is also worried about the fall in the royalty payment for the use of limestone as some of the companies are cutting the production levels. There are about 16 major plants and about 22 mini-plants engaged in the cement production in the state. The total installed capacity is over 12 lakh tonnes per month, said the sources.

Due to proximity to the raw materials, Andhra Pradesh has been the largest producer of cement in the southern India. While the cement majors like Gujarat Ambuja have shown interest to put in fresh investments in the sector, the existing players are agitating saying that the demand is far below than the supply.