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Chemical companies are taking a page from the airline playbook and raising prices to offset higher costs. The Dow Chemical Company (NYSE: DOW) announced today that on June 1st it will raise the price of all of its products by up to 20 percent in order to shield themselves from rising energy, feedstock and transportation costs. Such costs moved from just $8 billion in 2002 to a staggering $32 billion this year.

"Our first quarter feedstock and energy bill leapt a staggering 42 percent year over year, and that trajectory has continued, with the cost of oil and natural gas climbing ever higher," Liveris said. "The new level of hydrocarbons and energy costs is putting a strain on the entire value chain and is forcing difficult discussions with customers about resetting the value proposition for our products."

Dow Chemical also blamed Washington for the energy crisis, saying that their failure to produce a comprehensive energy policy has caused the U.S. industry to lose ground when it comes to global competitiveness. Moreover, the domestic markets are also beginning to see demand destruction throughout the United States. Clearly, this is bad news and a bad forecast for the company.

This news is obviously very good for other international companies in the sector. Those operating in regions with cheaper energy will be able to better compete on price and steal marketshare while they will also be faced with the ability to raise their own prices to increase margins. E.I. du Pont de Nemours & Company (NYSE: DD) - better known as simply DuPont - is one of these competitors that rose on the day.

DuPont has also experienced the effects of higher energy costs. In fact, the company recently urged the United Nations to move agriculture higher on the agenda. The global food crisis is not only hurting people around the world, but also increasing costs for companies like DuPont and Dow Chemical. Meanwhile, both companies are also working on promoting energy solutions to counteract soaring oil costs.

DuPont shares rose $0.19, or 0.4%, to $47.19 in early trading.

Dow Chemical rose $0.14, or 0.35%, to $40.37 on the news.

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