ISLAMABAD, March 9: The federal government on Tuesday allowed import of re-rollable scrap and asked Pakistan Steel (PS) to start importing steel billets immediately to ease the prevailing steel crisis.

The government has also agreed to reduce import duties on iron ore, cooking coke, balls and coils besides some sales tax relief in the next few days provided the steel industry guaranteed stable prices. The issue would be further deliberated between tax authorities and the industry people, sources told Dawn.

These decisions were taken here on Tuesday at a meeting presided over by Industries Minister Liaqat Ali Jatoi and representatives of Pakistan Steel, CBR, Finance Ministry and steel industry.

An official statement confirmed that import of re-rollable scrap has been allowed with immediate effect to augment the supply of iron and steel and to bring the price of these products down. However, specifications of the scrap would be determined later.

Since there are no restrictions on the import of billets by Pakistan Steel or the private sector, the PS was directed to take immediate steps to import billets.

The sources said the representatives of the industry had asked the government to do away with 5 per cent duty on iron ore and cooking coke and make reasonable reduction in duty on billets and coils from the existing level of 20 per cent.

The CBR and Finance Ministry officials agreed to provide any relief in duties provided the industry representatives was ready to guarantee stable steel price. This was, however, not acceptable to the industry people, these sources said.

The CBR officials believed that reduction in duties, like always, would not be passed on to the consumers and would be pocketed by the steel industry. It was, thus, decided that CBR and steel industry people should sit together separately and negotiate a strategy within a couple of days.

The PS chairman Gen (retd) Abdul Qayyum proposed that reduction in duties should be available till June 30 but CBR opposed this suggestion to fix a date anticipating hoarding by the profiteers. So, it was decided to link the reduced duties with the market situation.

The meeting also decided that strict vigilance and action against hoarders and profiteers shall be taken by the relevant government agencies and raids would also be conducted in this regard. The provincial authorities have also been advised to be vigilant and take strict action against profiteers.

The meeting was informed that current steel crisis was because of short supply in the international market as China had made heavy bookings of steel products on long term contracts.

The steel prices have almost doubled in the recent days. More than 70 per cent of four million tons of local demand is met through import and only 30 per cent or about 1.1 million tons steel is produced by the PS.

An official statement quoted Industries Minister Liaqat Ali Jatoi as telling the meeting that although the international market for steel product was volatile due to global shortage of raw materials resulting in substantial increase in the prices of steel products in international market, the domestic prices however, had not increased in line with international price.

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