Cement prices are expected to go up by Rs 8-10 per bag in the northern region due to the Supreme Court order to ban use of pet coke in the NCR region, India Ratings and Research (Ind-Ra) has said.
Cement manufacturers particularly from Rajasthan, where most of the clinker plants are situated, will have to switch to either domestic coal or imported coal and it will increase their power and fuel cost per tonne, per bag by Rs 8 to 10.
Ind-RA said that according to clarification issued by the Environmental Pollution (prevention and control) Authority on October 27, such ban will be applicable only in those districts of Uttar Pradesh, Haryana and Rajasthan which fall under NCR.
"However if the state governments fail to issue a similar notification, then the ban will automatically be applied to the whole state, impacting all cement manufacturers. Industries using pet coke and furnace oil will have to comply by the norms issued by Central Pollution Control Board latest by 31 December 2017," it added.
"There would be intermittent headwinds as cement manufactures could have some inventories of pet coke in place and the court has not clarified on the use of this stock post ban," the rating agency said in a statement.
Ind-Ra further said: "Cement producers will pass this increase in costs to the final consumer, leading to an increase in cement prices.
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