More scope to soften cement prices: FM

Just a day after, reducing the prices on cement commodity, Union Finance Minister still believes that the prices of cement can further be cut in near future. The comment of FM has come after a day when the cement making firms have reduced the prices of cement between Rs.3 to Rs.7.5 per bag for 50 kg.

“I do think that there is a scope for significant reduction in cement prices,” said Chidambaram to the media in the capital. He was briefing reporters after the cabinet meeting.

While asking the question regarding cement makers’ demand to cut excise duty, FM denied about such demand and said, “Ministry has not got any official request on price reduction.”

While speaking on the crude oil prices, FM said, “The standing committee on petroleum and natural gas has recommended to scrap the custom duty to reduce burden on Oil Marketing Companies (OMCs),” however he also added, ‘Just reduction of import duty of crude oil has no impact on the administered price,’ means there would be no effect in the retail price of fuels oil.

At present, the crude oil has crossed the $126 per barrel in the international market and thus Indian OMCs are facing the fiscal deficit of 1.8 lakh crore as against last years’ deficit of 70.5-thousand crore.

In the measure of taming inflation, FM has also succeeded to convince the steel makers including the second producers of steel to cut the rates in the steel prices.

The primary steel making companies that make hot rolled coil, cold rolled coil, galvanised steel etc. became ready to reduce the prices up to Rs.4000 per tonne while the secondary steel making companies that makes flat steel has announced to reduce the prices up to Rs.4000 per tonne on the request of government, but on the other hand, the steel makers have also asked to reduce the export duty from the ministry.

On this issue, FM said that Ministry has not got such proposal from Steel Ministry so far, “If there is a rethinking, I suppose the steel ministry will send me a proposal,” said Chidambaram.

Steel Secretary R S Pandey on Wednesday had announced, “We met secondary producers of flat products and they all have agreed that like the major producers have done they all will cut the prices of their products by Rs 4000 per tonne”. The steel producers like Jindal Saw and Bhushan Steel agreed to lower prices for three months, he said.

These measures of government is going in the efforts of containing the inflation that have touched the 3 and half years’ high mark of 7.61 percent for the week ended April 26 as against last year’s 6.01% for the same week.

For taming the inflation government had scrapped the import duty on edible oils, pulses and several food products including basmati rice, while imposed a ban on the export of non-basmati rice, wheat and cement products and at the same time discourage export of steel by scrapping the incentive on export duty.

Now, government has succeeded to reduce the price on steel and cement commodities. But, ‘will it affect the inflation?’ the future will reply it.

The price cut will not applicable to those companies, which are already supplying cement at subsidy rates to states like Tamil Nadu and Andhra Pradesh, as per official said.