Export regulations on petrochemical products, polymers improbable

11-Jul-08
According to Indian Plastic federation (IPF), export regulations or duties on petrochemical products like polymers are improbable in the immediate future despite the government considering such an action to combat inflation. In a meeting between the representatives of plastic industry and the Ministry of chemicals and fertilizers, the problems of the irregular and unpredictable price hike of plastic raw materials by the primary producers and inadequate availability in the domestic markets were discussed. Among the attendees in the meeting were the representatives of Haldia Petrochemicals Ltd (HPL), Gas Authority of India Ltd (GAIL) and Reliance Petroleum, which forms the leading raw material suppliers to the plastic industry. The IPF has voiced the demand of a 5% cut in customs duty on polymer and naphtha imposed in the last union budget and to reduce the excise duty on plastic raw materials and finished goods from 14% to 8% which was whole heartedly supported by the primary producers. To this, the finance and petrochemical ministries are also discussing a mid-year correction of import duty on naphtha, re-imposed in the 2008 budget. In addition, IPF also asked for the relaxing a ban on import of post-industrial scraps, which can be used as raw materials to narrow the gap between demand and supply. The petrochemicals department in the ministry of India is in talks with the Ministry of Environment and Forests (MoEF) and will take a decision on the allowance of import of post-industrial scrap. Responding to the issues, the raw material producers have voiced their difficulty to check the prices in light of the spiking crude prices. However, they have assured to hike the prices only once a month in an attempt to soften the impact. On the issue of insufficient availability of raw material for domestic markets, polymer makers including Reliance Industries Ltd (RIL) and Haldia Petrochemicals Ltd (HPL) promised to give priority to domestic buyers.
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