The big news doing the rounds is that cement companies has decided to hike the cement prices by Rs 2-4 per bag.

While confirming the development, H.M.Bangur (MD, Shree Cements) said, “There is no price rise due to shortage but it is done as an effort to cover up cost.”

Bangur added that the company has passed on the benefit of excise duty cut on bulk cement to its customers, however prices of cement bags have risen as there was no relief for those products.

At present, the industry capacity utilisation stands at 85% versus 95%.

Meanwhile, in Gujarat and Mumbai, all the major cement manufactures have raised prices by Rs 5-8 per 50-kg bag from Sunday. A 50 kg cement bag is now available at around Rs 240 in Mumbai and Gujarat.

It can be recalled that the union government has recently reduced the excise duty on the cement prices.
 
However, experts do believe that the hike is not in direct proportion to the increase in demand, which has been marginal. In order to drive up its prices, the cement companies are trying to create an artificial supply gap in the market.

Commenting over this issue, a Mumbai based dealer requesting anonymity, said, “Cement makers have reduced their supplies and are creating a crisis in godowns. There are no problems with transportation but supply gap is leading to price hikes.”