New Delhi - Determined to quell inflationary pressures of <link _top>steel prices on the economy and enhance availability, the government is likely to ask leading companies to resort to dual pricing, i.e., different prices for domestic sales and for exports. The <link _top>steel ministry is apprehensive that manufacturers can marginally increase prices since the <link _top>cost of production has spiraled due to steep rise in input costs.
“While producers can charge export parity price for overseas sales, all domestic sales should be based on declared domestic prices,” a ministry official told. The move comes despite firms assuring the government they would publicise their prices to discipline hoarders and review the maximum retail price (MRP) arrangements on all flat products to prevent speculation.
With the difference between the landed cost of import and domestic retail prices still as high as Rs 10,000- Rs15,000 the ministry is wary if a hike in prices by companies could have a ripple effect on the wholesale price index (WPI). <link _top>Steel has a 40-45 per cent weight in the WPI.
“But with prices of critical <link _top>steel-making inputs like <link _top>iron ore, <link _top>coke and <link _top>ferro-alloys shooting up, the cost of <link _top>steel production too has increased. For example, coking <link _top>coal prices are up by $200 a tonne, which would enhance the <link _top>cost of production by Rs 8,500 to Rs 9,000,” a company source said.
