Cement companies plan price hike from April 5 as fuel costs surge

India’s cement industry is preparing for a fresh round of price hikes from April 5 as manufacturers attempt to offset rising input costs and protect margins in the upcoming quarters. According to a recent sector report, companies across the country are planning coordinated price increases amid a sharp rise in fuel and packaging expenses.

The proposed revision is expected to be most significant in South India, where prices may rise by around Rs 50 per bag. In other regions, including North, West and Central India, the expected increase ranges between Rs 20 and Rs 30 per bag. However, analysts believe the actual price realisation may be lower, especially in the southern market, where demand recovery remains gradual.

The primary reason behind this move is the steep increase in imported pet coke and coal prices over the last few months. Global crude oil volatility and supply-side disruptions have pushed fuel costs significantly higher. This is likely to raise production costs by nearly Rs 200 per tonne for cement manufacturers from the first quarter of FY27.

In addition, packaging costs have also surged sharply. The cost of polypropylene cement bags has nearly doubled in recent months, further adding pressure on operational margins. Industry estimates suggest that the combined impact of fuel and packaging could increase costs by Rs 250 to Rs 300 per tonne.

Demand trends across regions continue to remain mixed. While the East has shown stronger growth, supported by infrastructure and construction activity, North and West India witnessed slower demand in March due to festival-led disruptions and unseasonal rains. South and Central markets reported moderate growth.

Major cement producers are currently relying on lower-cost fuel inventory purchased earlier, which may temporarily cushion the margin impact. However, if elevated energy prices continue into the next quarter, the success of the April price hike will be crucial for sustaining profitability.

The development is expected to have a direct impact on construction and real estate sectors, especially in price-sensitive regional markets where material cost escalation can influence project timelines and budgets.