Cement manufacturers on Tuesday increased prices by an average Rs 6 per 50-kg bag in Mumbai, following a proposal in the budget to restructure the present excise duty, dealers and analysts said, reports Reuters.
Cement Stockists and Dealers' Association of Bombay President Sanjay Ladiwala confirmed the development, adding, all the companies have increased the prices. At present, the hike has been affected only in Mumbai, he said. India's Finance Minister Pranab Mukherjee, in his budget announcements for 2011/12, has proposed to replace existing excise duty rates with composite rates having "an ad valorem and specific component with some rationalisation". "The budget proposal has resulted in a Rs 2.50-3 increase per bag, and with effect from today cement manufacturers are increasing the prices, passing on the excise duty to customers," said Ravi Sodha, analyst with Elara Capital. The average cement prices are in the range of around Rs 260-265 a bag in Mumbai, he added. The industry had termed the budget as "slightly negative" for the sector, and feared a rise of Rs 8 in cement prices. The only relief for the sector was a reduction in basic customs duty on petcoke and gypsum, both used in cement production, to 2.5%. "Apart from the budget proposals, an increase in coal prices of around 30% is another reason (for the cement price increase)," said Rupesh Sankhe, sector anlayst with Angel Broking. The companies will have to raise the prices in the northern and southern regions too, Sankhe said, adding, "Otherwise they would start reporting losses."Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
