Alarmed by the recent surge in steel prices, the Union Steel Ministry has proposed setting up of an independent regulator to monitor and fix the prices of steel. It has also supported a demand to abolish the present 5 per cent import duty on scrap.

This was announced by Steel Minister Ram Vilas Paswan to reporters after a meeting of the 18th national steel consumers council in New Delhi on Saturday. Paswan said that he would take the proposal to the government within the next three months.

The proposed National Steel Price Regulatory Commission would supervise issues relating to the price and distribution of steel to ensure that the products reach the consumers at the right price and in adequate quantities.

The statement by the minister has raised concerns among the steel industry that it would return to the pre-liberalisation days of 1991 when the government used to regulate prices of steel produced by the only two players, the state-owned Steel Authority of India Ltd and Tata Iron and Steel Company Ltd.

At present, there are five major producers of hot-rolled coils -- SAIL, Tata Steel, Essar Steel, Jindal Vijaynagar Ltd and Ispat Industries.

According to industry sources, the proposal, if implemented, would be the first of its kind in the commodities sector and may lead to similar demands from other sectors such as cement.

Moosa Raza, president, Indian Steel Alliance, said in a statement that the association of the five HRC producers would examine the proposal in detail before commenting on the subject.

Paswan said there was a consensus at the consumers meet that the import duty on finished steel should be reduced to 5 per cent from the present 15 per cent.

He said the steel prices would be advertised by the public-sector undertakings as and when any change in prices take place.