October 12, 2008

Steel minister warns private steelmakers over price hikes

Mr Ram Vilas Paswan union steel minister has cautioned private steel makers that the government will take stringent steps if steel prices continue to rise. Mr Paswan said the government would be left with no option other than to constitute a steel regulatory body if steel companies continued to defy the government.

Mr Paswan said that “Even if the government does not want to have a regulator in place for controlling steel prices, circumstances are compelling the centre to do so. The PM is seriously concerned about increasing prices of steel. I had talks with the PM this morning over telephone. I will meet him soon after I return to Delhi in the evening. If steel makers do not bring prices under control, the government will be forced to set up an independent regulator.”

He warned that “I have done that in the past in telecom. I will again do it in steel if private players failed to take note of the circumstances.”

He said that the earlier increase was justified owing to rise in input costs, but recent hikes have brought about disparity between prices of finished steel and costs of inputs. He said “For, a 50% increase in iron ore prices should result in a 10% hike in steel prices, but it is happening the other way round.”

He said that though the centre has appointed a committee to monitor prices, private steel makers are keeping it in dark and increasing prices according to their own discretion. Mr Paswan said private players were raising prices without taking the committee into confidence.

The steel ministry could also recommend to the finance ministry that the import duty on steel, which currently stands at 5%, be removed.