The All India Tyre Dealers' Federation (AITDF) has moved the commerce ministry to probe possible cartelisation of tyre manufacturers by the Competition Commission of India (CCI). The federation wants the CCI to check the upward movement of tyre prices despite a sharp drop in natural rubber rates in the last one year.
In its letter to commerce minister Anand Sharma, the federation sought CCI action against alleged oligopoly of domestic tyre manufacturers, said SP Singh, convenor, AITDF.
Despite a sharp drop in rubber prices, sliding from a high of R240/kg a year go to R151/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 tyres. The rubber prices in 2008 went up to the then peak level of R140/kg in August/September 2008 from R75/kg in March 2008 and similarly, crude oil price globally went up to $142/a barrel from $65/a barrel.
According to Singh, the steep decline in natural rubber prices has not so far augured well for tyre trade and consumers because the domestic tyre industry is maintaining a self-styled ‘price control’ on tyre pricing.