After the rise in diesel prices for retail and bulk buyers cement makers are likely to take a marginal hit. Since diesel is mainly used for transportation of cement and its raw materials, coal and fly ash, industry experts say it will be adding to the cost of sales and not the production cost.
The rise in transport cost in terms of per tonne per kilometre would be a Rs 1 on a 50-kg bag. About 55 per cent of all cement is transported through road and the rest is largely by rail.
Managing Director of a large cement company says that this will not be cement makers’ costs. Transporters’ charges would go up and cement firms will have to compensate while making payments, he says. Since 80 per cent of cement reaches consumption centres via roads in a radius of 400 km from the manufacturing site, the firms will incur an additional cost of 70-80p a bag, he adds.