Cement companies across the company have increased the price of the commodity in the range of Rs10 to Rs12 a bag, to offset the twin effects of the excise duty hike and the rise in diesel rates.

The 4.5 per cent hike in Mumbai alone, has come into effect from March 1, and has been implemented in all zones in India. This is also one of the first times that cement companies across the country have raised prices uniformly, as the commodity is zone-specific and cement prices depend on the market conditions of each region.

The last time that cement prices were raised by a large quantum was in November 2009 when prices were hiked by Rs10 per 50 kg bag after a shortage in rail wagons affected supplies in the key markets of western and southern India. Price hikes in this industry have always been Rs3 to Rs5 per 50 kg.

In Mumbai, the country’s largest cement consumption market, prices have been risen by Rs12 per bag. Retail prices have touched Rs280 and wholesale price in the trade segment is commanding around Rs265 per bag.

Although the price hike is attributed to Budget proposals of excise duty and diesel rate rise, analysts believe, fast capacity addition in the world’s second-largest cement growing market after China, is likely to depress prices and hence makers are squeezing each opportunity.

Cement players in the country have been aggressively ramping up capacity due to a spurt in domestic demand, which is one of the few markets in the world to see a sharp rise in cement usage.

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