Indian cement makers are likely to hike cement prices by around INR5/50kg bag from Tuesday and Wednesday to pass on the proposed effective hike in excise duty to consumers, dealers and stockists told the Economic Times of India. In the western region, companies had already told stockists over the weekend about a hike of INR3 per 50kg bag to be implemented from March 1.
In Mumbai, a key construction market, the wholesale cement price is currently around INR276 per bag, while in Ahmedabad the price is INR250, following a hike of INR7-10 per bag in the last week. In Chennai, the cement price is hovering around INR245 per 50kg.
"Cement manufacturers are already reeling under cost pressure and have no option but to pass on the additional tax burden to consumers," said the marketing vice president of a south India-based cement company.
The price hike is expected to be absorbed in most of the markets except south India where rather than a direct hike manufacturers may have to tweak distributors’ and stockists’ discounts marginally, he said.
Some manufacturers may not increase the prices immediately and would do so in a phased manner.
"We will not increase the prices immediately, we’ll wait to see if market absorbs the hike implemented by others," said Shree Cement managing director HM Bangur.