Plastics, tyres may pinch as oil soars
Spiralling crude oil prices can hurt consumers in more ways than just rising prices at the pump.
By TNN |
MUMBAI: Spiralling crude oil prices can hurt consumers in more ways than just rising prices at the pump. From toothbrushes to car tyres, consumers may have to fork out more, with prices of crude oil by-products rising more than 30% across the board since January 2008.
Petrochemicals major Reliance Industries, which sets the tone for polymer prices in the country, has raised rates by 10-15% across grades in May. This has also led smaller polymer dealers to revise prices.
Oil reached a high of $135 a barrel in the third week of May, rising by over 40% since January���s levels of $94. The rally was driven by worries of tight supplies and mounting global demand over the long term.
All India Plastic Dealers��� Association president, Minesh Shah, said, ���Rising crude oil prices have forced us to increase prices.��� He said prices were revised three times within a month. Often, the collateral damage caused by such hikes goes unnoticed as it increases the prices of small, innocuous items. For instance, Mr Shah said that in the past one year, he has revised the price of plastic coffee cups he manufactures six times, though the hikes were marginal.
The price of polyvinyl chloride (PVC), another crude oil derivative used in the manufacture of items ranging from furniture to footwear, has also risen sharply. Even the polythene bags you line your garbage can with will be expensive.
However, the most imminent rise is in monsoon wear. Jagdish Tanna of Lila Polymers, a PVC supplier to raincoat and umbrella manufacturers said, ���We have raised prices by about 20-30% in the past two months. Manufacturers cannot absorb the hike any longer, and they will pass it on to consumers next month.���
So far, consumers have been cushioned by cheaper Chinese imports. But with the rupee depreciating in the past two months by over 5%, the price advantage is waning. Consumers will feel the heat, traders say.
Prices of plastic buckets, mugs, utensils and hangers have already risen over the past week. Yatin Shah of Nutan Glasssware Centre, a Mumbai retailer who sources directly from Daman ��� a major hub for plastics ��� has been forced to pass on the hike to consumers, and his already-thin margins are shrinking. Today, he���s preparing for future hikes. ���Prices are higher by 10% since last week. They are going to rise further in June,��� he said.
New mothers would have to brace themselves for higher diaper and tissue prices as well in the coming months. Other products that would bear the brunt, even if they have a lower content of crude derivatives, would be cosmetics. So the next time you pick up that new shade of lipstick or nailpolish, don���t be too surprised if the price tag reads a little different.
Petrochemicals major Reliance Industries, which sets the tone for polymer prices in the country, has raised rates by 10-15% across grades in May. This has also led smaller polymer dealers to revise prices.
Oil reached a high of $135 a barrel in the third week of May, rising by over 40% since January���s levels of $94. The rally was driven by worries of tight supplies and mounting global demand over the long term.
All India Plastic Dealers��� Association president, Minesh Shah, said, ���Rising crude oil prices have forced us to increase prices.��� He said prices were revised three times within a month. Often, the collateral damage caused by such hikes goes unnoticed as it increases the prices of small, innocuous items. For instance, Mr Shah said that in the past one year, he has revised the price of plastic coffee cups he manufactures six times, though the hikes were marginal.
The price of polyvinyl chloride (PVC), another crude oil derivative used in the manufacture of items ranging from furniture to footwear, has also risen sharply. Even the polythene bags you line your garbage can with will be expensive.
However, the most imminent rise is in monsoon wear. Jagdish Tanna of Lila Polymers, a PVC supplier to raincoat and umbrella manufacturers said, ���We have raised prices by about 20-30% in the past two months. Manufacturers cannot absorb the hike any longer, and they will pass it on to consumers next month.���
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So far, consumers have been cushioned by cheaper Chinese imports. But with the rupee depreciating in the past two months by over 5%, the price advantage is waning. Consumers will feel the heat, traders say.
Prices of plastic buckets, mugs, utensils and hangers have already risen over the past week. Yatin Shah of Nutan Glasssware Centre, a Mumbai retailer who sources directly from Daman ��� a major hub for plastics ��� has been forced to pass on the hike to consumers, and his already-thin margins are shrinking. Today, he���s preparing for future hikes. ���Prices are higher by 10% since last week. They are going to rise further in June,��� he said.
New mothers would have to brace themselves for higher diaper and tissue prices as well in the coming months. Other products that would bear the brunt, even if they have a lower content of crude derivatives, would be cosmetics. So the next time you pick up that new shade of lipstick or nailpolish, don���t be too surprised if the price tag reads a little different.
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