Wholesalers and retailers of steel products, including iron rods, according to a story we carried yesterday, have expressed disgust over the failure of manufacturers of steel products to reduce their prices, as the government has reduced electricity by 50%.
They described as unacceptable, selfish and unpatriotic the increase in prices of steel products by the seven manufacturing companies operating in Ghana. The companies, B5 plus, Ferro Fabriks, United Steel, Tema Steel, Sentuo Steel, Fabrimetal and Rider Steel Company Limited, have, in a communication to wholesalers and retailers, indicated that an adjustment in the prices of mild steel had already been effected.
The Chronicle understands the increment by the seven companies has been happening on a monthly basis since November 2019. Since Ghana is practicing free market economy, we cannot completely condemn the steel companies for the action taken. Competition plays a key role in marketing, and if a company thinks overpricing its products will inure to its benefit, so be it.
Unfortunately, it is not only one steel company that has taken the decision to increase its prices, but all the steel companies in Ghana, and this is where the problem lies. The steel companies are now operating as a cabal and making it virtually impossible for anyone to break their fronts. We, however, think they can still be reined in because the path they have chosen goes beyond all business ethics.
During one of his recent addresses to the nation, President Akufo-Addo announced that in order to cushion businesses and individuals from the effect of the Covid-19, his administration had decided to subsidise electricity bills by 50%, starting from April and ending in June this year.
It is interesting to note that power forms a major component in the production chains of these steel companies. Therefore, with the President yanking off 50% of their huge electricity bills from their accounts books, one would have expected that these companies would follow suit by slashing down their prices as well.
But no, this did not happen, they have rather increased the prices of their products, which form a key part in the industrialisation of this country.
Though The Chronicle admits that electricity is not the only component in the production mix, it nevertheless, contributes tremendously to the production of the steel. It is on the basis of this that The Chronicle thinks the prices should have rather come down instead of upward adjustments.
We are, therefore, calling on the Ministry of Trade and Industry to engage the steel manufacturers and see how best they could resolve the issue in the interest of the public.
But should the producers insist on increasing the prices, as they have already started doing, then we suggest to the government to withdraw the 50% subsidy given to them. There is no basis for them to continue to enjoy when they are not respecting the terms under which the subsidy measures were put in place by the government.
The post Editorial: Unpatriotic steel companies should be reined in appeared first on The Chronicle Online.
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