Reliance slashes polymer prices

Taking a cue from Tata Steel, which cut steel prices by Rs 2,000 per tonne, Reliance Industries Ltd (RIL) today announced a similar initiative and reduced prices of all polymers by Rs 2,000 per tonne with immediate effect.

In the face of rising input costs and this reduction, Reliance would be absorbing 40 per cent of the rise in input costs, the company said in a statement.

Reliance said its initiative was "to help the government in its efforts to battle inflation and contain consumer prices. These proactive measures are taken to support the domestic industry in spite of the unprecedented rise in the costs of the input materials."

RIL's product prices would be lower by an average $120 per tonne, compared with the prevailing international prices and the difference had increased to a peak of $150 a tonne today, substantially below landed price of imported polymers, the statement said.

RIL said crude oil prices hit record highs in August touching almost $50 a barrel and were now hovering at $ 45.60 per barrel. Crude and naphtha prices have rallied since April 2004.

India is at a major cost disadvantage as compared with its neighbouring Asian countries on both crude and naphtha by $3-4 per barrel and $3 per tonne, respectively, due to its import duty structure. The import duty on these products is at 10 per cent in India, compared with no duty in other Asian countries.

Reliance has pointed out, that at current reduced prices, the effective duty realisation is below 10 per cent as compared with the nominal duty rate of 20 per cent.

Reliance Industries Ltd said it, along with other players, had made several submissions to the government to reduce the duty from 10 per cent to 5 per cent "in the larger interests of the economy and help further in battling inflationary forces".