Taking into account the change in excise duty in Budget 2011-12, players have increased the prices of cement by Rs 4-6 per 50 kg bag in the western region. The price hike also considers the rising demand from the construction sector during the peak season. The Budget has proposed the replacement of the existing excise duty rates with composite rates having an ad valorem and specific component. Earlier, cement companies used to pay 10 per cent excise duty on the MRP, now it will be 10 per cent on ad valorem, which is 10 per cent on ex-factory price plus Rs 160 per tonne. Cement prices in the country are currently in the range of Rs 250-280 per bag and are set to increase further, since March to May is the peak season for construction activities. Cement players had hiked prices twice in January by a total of Rs 15 per bag with one more round of price hike in February by Rs 6-8 per bag. According to industry players, shortage of railway wagons and expected increase in government spent in the fourth quarter had led to price rise in the last two months. Other reason attributed is the rise in coal price, which has gone up to $225 per tonne, from $210 per tonne a quarter earlier.

Taking into account the change in excise duty in Budget 2011-12, players have increased the prices of cement by Rs 4-6 per 50 kg bag in the western region. The price hike also considers the rising demand from the construction sector during the peak season. The Budget has proposed the replacement of the existing excise duty rates with composite rates having an ad valorem and specific component. Earlier, cement companies used to pay 10 per cent excise duty on the MRP, now it will be 10 per cent on ad valorem, which is 10 per cent on ex-factory price plus Rs 160 per tonne. Cement prices in the country are currently in the range of Rs 250-280 per bag and are set to increase further, since March to May is the peak season for construction activities. Cement players had hiked prices twice in January by a total of Rs 15 per bag with one more round of price hike in February by Rs 6-8 per bag. According to industry players, shortage of railway wagons and expected increase in government spent in the fourth quarter had led to price rise in the last two months. Other reason attributed is the rise in coal price, which has gone up to $225 per tonne, from $210 per tonne a quarter earlier.