Dow Chemical, the biggest U.S. chemicals manufacturer, said Tuesday it will raise prices for its products by as much as 25 percent, institute freight surcharges and cut back on output of some products because of soaring energy prices.
Andrew Liveris, Dow's chairman and CEO, said the company had no choice but to make the moves to survive the unprecedented increase in oil prices.
"By taking down assets, by raising prices and getting as much of it to stick as we can, we're fundamentally moving ourselves so we cannot be swallowed by this massive surge," Liveris said on CNBC.
Dow shares gained 1.5 percent in premarket trading following the news.
The price hikes are the second in a month by the Midland, Mich.-based company that makes thousands of products ranging from plastic wraps to car parts and insecticides.
Dow said it is also undertaking a series of cost reduction measures at its automotive unit because of the decline in North American auto sales.
Dow said its costs for oil and gas feedstocks and energy bills had jumped fourfold over the past five years to an estimated $32 billion this year.
Liveris was not optimistic that energy prices would stage a significant turnaround.
"I'm convinced that the China consumption, everything we're seeing out there, the long-term trendline is we're seeing oil going to its new plateau," he said. "I believe we're heading north from here, not south."
Last month, the company hiked its prices by 20 percent in an effort to offset the steep jump in oil and gas.
"The price increases we announced on May 28 helped, but they were not enough to fully cover the additional costs we are now facing," Chairman and Chief Executive Officer Andrew Liveris said in a statement.
From Aug. 1, Dow will implement a surcharge of $300 per shipment by truck and $600 per shipment by rail in North America for customers buying chemicals, hydrocarbons and plastics. Freight charges will be applied in other regions later this year.
-- Reuters contributed to this report.