With the 3 month moratorium by Indian steel majors on holding to their reduced price line slated to expire early next month, Indian government has made it clear that any sharp increase in prices by the producers could attract fiscal measures as the inflation is still high and has again urged steel makers to be reasonable.
Mr Ram Vilas Paswan union minister of steel told media that government will discourage steel firms from increasing prices after a 3 month freeze, which the companies had agreed to ends early next month.
Mr Paswan said that "I have instructed the steel secretary to see that steel companies do not raise prices according to their own will. There must be a reason behind price increase. They must explain their compulsion to increase prices.
Steel firms say they need to increase prices as the cost of inputs is rising, but Paswan said the government would verify this on the basis of the experience of state run firms.
As per a report in ET, the steel ministry is understood to have asked state run Steel Authority of India Limited to maintain prices at current levels for a few more months. With SAIL controlling over 30% of domestic market, this decision would mean that other companies would also have to resist any price rise.
The report added that the steel ministry is also likely to meet companies next week seeking extension of the price moratorium for a few more months.
Indian government to monitor steel price hike, if
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Posted - 07/28/2008 : 03:11:40
