Cement prices in India are expected to increase by INR3-4/bag by mid-January as the government has decided to hike the import duty on petcoke from the current 2.5 to 10 per cent.

The rise in duty is expected to increase production costs by INR50-60/t and sector analysts predict the increase will be passed on to customers.

"In case they are not passing it on, their EBITDA is likely to get affected and under the current scenario, no company will wish for it", an analyst with stockbroking firm Motilal Oswal Financial Services told India’s Business Standard.

While the price of petcoke is currently 10-12 per cent higher than that of imported coal, its lower volume requirement means it is more cost-effective for cement producers to use.