Posted on 19 Mar 2008
Union steel minister Ram Vilas Paswan said the Prime
Minister had spoken to him about the recent spurt in prices. “I received a call
from the Prime Minister today. He is concerned,” Paswan said in Burnpur. The
minister said he would consult the Prime Minister’s Office to address the
problem.
One of the options being contemplated by the ministry is to
set up an independent regulator to monitor prices.
“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.
The steel ministry has set up a monitoring committee under
joint secretary J. Elias for steel prices.
Paswan said private players were raising prices without
taking the committee into confidence.
Steel prices have risen Rs 5,000-6,000 a tonne in the last
three months as companies passed on a hike in raw material prices to users.
Another round of hike is in the offing in April when global iron ore mining
majors Vale and Rio Tinto raise prices by 65 per cent.
Benchmark hot-rolled coil prices are now hovering at Rs
35,000 a tonne in the domestic market. Paswan admitted that there had been a
rise in the cost of inputs — iron ore and coking coal — but doubted whether it
could push up steel prices to the extent it had.
In February, Paswan forced steel companies to roll back by
Rs 500 the price hike they had effected that month.
However, this is for the first time that the Prime Minister
is intervening.
Only last month Paswan had said that the government would
not like to be seen as meddling in the affairs of steel companies. Now it looks
poll politics is weighing more on the government than economic reason.
