The Hindu Business Line : Centre seeks ways to halt rising steel prices

“If we feel that the rise is unjustified and industry ignores our request to lower prices, we will approach the Government on how to regulate rising prices.”

Our Bureau

New Delhi, Feb 2 In the wake of rising steel prices, the Union Government plans to meet with private-sector steel producers next week. The Steel Ministry also plans to seek a reduction in duty on key raw materials in the forthcoming Union Budget.

“We are concerned about the rising price of steel,” said Union Steel Minister Mr Ram Vilas Paswan here on Saturday. Major domestic steelmakers have hiked prices by up to Rs 2,500 per tonne across products from February 1. This is the second time prices of steel have been revisited by private and public-sector manufacturers in as many months.

“During the meeting, which is likely to be held next week, we will try and find out why the prices are going up. If we feel that the rise is unjustified and industry ignores our request to lower prices, we will approach the Government on how to regulate rising prices,” the Minister said. He also said there will not be much of an impact if only the public-sector steelmakers brought down prices.

The Steel Ministry has also written to the Finance Ministry, seeking removal of duty on coke and scrap iron. The Government currently levies a duty of 5 per cent on coke and 20 per cent on scrap iron.

While refraining from spelling out the steps the Government could take if private-sector steel manufacturers do not reduce prices, the Minister said there were several measures that could be examined. “Setting up a regulator could be the last option. But we are hoping that the private-sector steel manufacturers will themselves lower prices. The domestic per capita consumption of steel is low as compared to the global average and therefore it is necessary that prices come down,” Mr Paswan said.

Grant for FACT

The Government plans to make available a one-time grant of Rs 200 crore to the Fertilisers and Chemicals Travancore Ltd (FACT) to enable the company to sustain its operations.

At a press conference addressed by Mr Ram Vilas Paswan, officials said a proposal for providing FACT the funds had been sent to the Cabinet Committee on Economic Affairs in late January and is likely to be taken up soon.

This follows the Committee of Secretaries pointing out that closing down FACT was not an option as it would be more expensive to start a new plant at a later date and would entail additional import of fertiliser at higher costs.

Further, it had suggested a one-time interim grant of Rs 200 crore be made available from within the budgetary allocation of the Department of Fertiliser to enable FACT to sustain its operations till the end of March this year. The Department was also asked to look at the possibility of merging FACT with a well run public sector unit or making it a subsidiary of the PSU.

The Minister also announced that the Government is to introduce nutrient-based fertiliser pricing from April 1 this year.