Fresh Blow To Cement Makers As Import Duty On Pet Coke Is Hiked
Indian increases duty on pet coke imports fourfold to 10%.
Cement maker’s relief from the Supreme Court’s decision allowing use of pet coke was short-lived. After the top court eased the curbs, India increased the duty on imported pet coke fourfold.
The government restored the duty to 10 percent from 2.5 percent, removing exemptions on imports, according to a Bloomberg report quoting people with the knowledge of the matter. Pet coke is a key fuel used in cement making.
It looks like a precursor to banning imports of pet coke altogether, said Murtuza Arsiwalla, analyst at Kotak Institutional Securities. This would increase the costs of companies heavily dependent on pet coke like Shree Cement Ltd., JK Lakshmi Cement Ltd. and JK Cement, he said.
Shree Cement declined to comment. Other companies didn’t return BloombergQuint’s calls.
About 45 percent of the 23 million tonnes pet coke India consumed in the year to March was imported, according to a Kotak Securities report. Pet coke prices have been rising with or without import restrictions, it said. Prices stood at $105 a tonne in November, reducing the cost arbitrage over other fuel sources, it said.
Pet-coke usage is the highest among north-based cement makers like Shree Cement, JK Lakshmi Cement and Mangalam Cement Ltd., according to an India Ratings report.
The apex court had on Oct. 24 banned the use of pet coke and furnace oil in Uttar Pradesh, Haryana and Rajasthan from Nov. 1 in view the pollution in Delhi and the National Capital Region, noting that the states had no objection to it. On Dec 13., the top court eased the ban to allow cement makers to use the highly polluting fuel.