The government is considering setting up an independent regulator to control steel prices with Prime Minister Manmohan Singh himself expressing concern over the issue.
Union steel, chemical and fertiliser minister Ram Vilas Paswan said here on Tuesday that the PM is concerned over the inflationary effect of rising steel prices.
?I had talks with the PM this morning over telephone. I will meet him soon after I return to Delhi in the evening,? Paswan said. ?If steel makers do not bring prices under control, the government will be forced to set up an independent regulator.?
He said 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. 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.
?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,? Paswan said.
He said if iron ore costs happen to be the cause for steel prices to go up, exports of the former should be stopped immediately. ?My department is absolutely opposed to exports of iron ore,? Paswan said.
He said, ? It is unfortunate that after my statement in parliament that steel prices are going to come down by Rs 500 a tonne, that has gone up by Rs 3,500. Why should prices go up when Cenvat came down by two percentage points and import duty on scrap lowered from 5% to 0%.?
?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,? Paswan said.