The increase in import duty was announced after the Supreme Court decided to lift the ban on the use of pet coke last week. The Supreme Court allowed the cement industry to use petcoke as a feedstock which had been banned last month to clean up the air pollution. While issuing the exemption order for cement units, the apex court asked the government to frame guidelines for the use of petcoke.
Ind-Ra said that the cement manufacturers may resort to coal imports due to low domestic availability. Cement manufacturers prefer using pet coke, as it contains high calorific value (7,500-8,500Kcal/kg), to non-coking coal (2,200-7,000Kcal/kg).
The rise in the import duty on pet coke will result in a rise in power and fuel cost per metric tonne to Rs 5-7 per bag, the report noted.
Total pet coke consumption in India increased by 34 per cent in October 2017 to 2 million metric tonnes as compared with the level recorded for October 2015. Of the total pet coke consumed in the country during FY17-1HFY18, about 50 per cent was sourced domestically and the remaining through imports.
According to Ind-Ra's assessment, 35 per cent of the total pet coke imports were consumed by the cement industry.
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