ERJ staff report (TP)
Chennai, India − The All India Tyre Dealers' Federation (AITDF) has moved the commerce ministry to probe possible cartelisation of tire manufacturers by the Competition Commission of India (CCI). The federation wants the CCI to check the upward movement of tire prices despite a sharp drop in natural rubber rates in the last one year, reported The Financial Express.
In its letter to commerce minister Anand Sharma, the federation sought CCI action against alleged oligopoly of domestic tire manufacturers, said SP Singh, convenor, AITDF.
Despite a sharp drop in rubber prices, sliding from a high of Rs240 (€2.82) per kg a year ago to Rs151 (€1.77) per kg, domestic firms held onto high prices by strangling free play of market forces. It is imperative for the government to intervene to find an immediate solution to the ongoing crisis, he said.
Apart from the sharp drop in natural rubber prices, crude prices have also dropped leading to softening of prices of various key inputs, which go into making tires. The rubber prices in 2008 went up to the then peak level of Rs140 (€1.64) per kg in August/September 2008 from Rs75 (€0.88) per kg in March 2008 and similarly, crude oil price globally went up to $142 (€104.4) a barrel from $65 (€47.8) a barrel.
According to Singh, the steep decline in natural rubber prices has not so far augured well for tire trade and consumers because the domestic tire industry is maintaining a self-styled ‘price control’ on tire pricing.
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Full story from The Financial Express