Mumbai:
The pending hike in steel prices has upset steel minister
Ram Vilas Paswan who has now threatened the private sector
steel companies with the setting up of a steel regulatory
body if they raise steel prices.
Following Paswan's threat, steel makers have deferred
the planned price hikes.
Addressing the 'national steel consumers' council' meeting
in Mumbai organised by the joint plant committee (JPC),
Paswan said the government was unhappy with the rising
steel prices ever since it came to power. He said the
steel regulatory authority (SRA) would be the last option,
but added, "We are ready with it. If there are frequent
price increases, we will be forced to use our last option,"
he said.
According
to Paswan, the proposed regulator would monitor the movement
of steel prices and identify the demand-supply bottleneck
though he did not indicate a time frame for setting up
the regulator.
Tata Steel had recently announced a Rs500 per tonne price
hike effective December 1, and others are expected to
follow suit.
The
steel industry attributes the rise in prices to increase
in rail freight, coupled with higher prices of coal and
gas. Steel Authority of India (SAIL) has decided not to
hike prices for now though private sector steel companies
do not seem to be in a mood to relent. Senior officials
from Ispat Industries (IIL), Jindal Iron and Steel (Jisco)
and Essar Steel said that as of now, no price increase
has been decided and that a decision would be taken in
a few days.
Though
SAIL has not raised prices officials said the company
would review its prices next month.
Steel
makers and the bureaucracy have not welcomed the formation
of the SRA at the steel ministry. Steel producers pointed
out to the minister during the meeting that input costs
have been increasing steadily over the past nine months.
An IIL official told Paswan that a regulatory authority
would be acceptable to the industry only if the government
decided on a fixed return on investment for steel manufacturers,
on the lines of the power industry and the fertiliser
industry.
Bureaucrats
raised doubts on the ability of a regulatory authority
to monitor prices. According to a bureaucrat from the
ministry, since
there are multiple players and products, it would be impossible
to regulate steel manufacturers.
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