|
|
Run up to the Budget: Petrochemicals sector
Key Inputs
Naphtha, Ethane, Propane and Natural
Gas.
Intermediates
Linear Low Density Polyethylene
(LLDPE), Low Density Polyethylene (LDPE), Polypropylene (PP), Polyvinyl Chloride
(PVC), Polystyrene (PS), Polyester Staple Fibre (PSF), Polyester Filament Yarn
(PFY), Linear Alkyl Benzene (LAB), Benzene, Toluene, Purified Terephthalic Acid
(PTA), Dimethyl Terephthalate (DMT) and Mono Ethyl Glycol (MEG).
Output
Plastic, Polyester, Synthetic Fibres, Rubber, Detergents, Solvents,
Glycol etc.
Background
- Feedstock prices have gone up substantially
in this fiscal year following the $14 per barrel jump in crude oil prices.
- Domestic producers are faced with excess polymer
production. Production by the end of current fiscal year is expected to touch
4.4 mn tons against the demand of 3.6 mn tons.
- End product prices among the polymers, which
firmed up during the first two quarters of the current fiscal year, witnessed
a downward trend in the third quarter.
Production Statistics
Production
|
HDPE
|
PVC
|
LDPE
|
|
Tons
|
Tons
|
Tons
|
Apr-00
|
28,867
|
65,785
|
26,002
|
May-00
|
30,764
|
67,372
|
30,422
|
Jun-00
|
27,954
|
68,965
|
29,918
|
Jul-00
|
26,844
|
70,020
|
28,439
|
Aug-00
|
28,804
|
71,965
|
31,664
|
Sep-00
|
27,214
|
66,346
|
20,947
|
Oct-00
|
24,448
|
67,584
|
21,668
|
Nov-00
|
24,448
|
66,884
|
21,668
|
Total Apr-Nov 00
|
2,19,343
|
54,4921
|
2,10,728
|
Total Apr-Nov 99
|
2,76,294
|
4,88,037
|
2,08,732
|
% Change
|
-20.61
|
11.66
|
0.96
|
Duty Structure (%)
Product
|
Excise
|
Basic
|
Surcharge
|
CVD
|
SAD
|
Naptha
|
16
|
5
|
Nil
|
Nil
|
Nil
|
Ethlyene
|
16
|
15
|
1.5
|
16
|
4
|
Proplyene
|
16
|
15
|
1.5
|
16
|
4
|
Butadine
|
16
|
10
|
-
|
16
|
-
|
Benzene
|
16
|
15
|
1.5
|
16
|
4
|
Toulene
|
16
|
15
|
1.5
|
16
|
4
|
HDPE
|
16
|
35
|
3.5
|
16
|
4
|
LLDPE
|
16
|
35
|
3.5
|
16
|
4
|
LDPE
|
16
|
35
|
3.5
|
16
|
4
|
PP
|
16
|
35
|
3.5
|
16
|
4
|
PVC
|
16
|
35
|
3.5
|
16
|
4
|
Previous budget (FY 2000-01) announcements
Basic customs duty on crude oil
was reduced from 20% to 15% and that on petroleum products was reduced from
30% to 25%.
Pre-budget Wish List
- The industry has demanded that customs duty
should continue at current levels of 35%.
- On the contrary, the plastic industry, which
is the end-user of petrochemical products, has demanded that customs duty
should come down from 35% to 15%.
- There is a demand for a cut in duties on catalysts,
chemicals and building blocks used by petrochemical industry.
- FICCI has demanded that the duty on LAB be reduced
to an effective rate of 22% from the existing 25%.
Key Players
Reliance Industries, IPCL, NOCIL,
Finolex Industries, Supreme Industries, Bombay Dyeing
Rediff-Dun & Bradstreet Budget Impact Analysis
Budget 2001
Tell us what you think of this analysis
|