South Africa government interferes Iscor pricing policy

South Africa government interferes Iscor pricing policy

South Africa government reportedly plans interfering pricing policy of Iscor, which may be an indication of its future intervention on pricing policies of other steel producers in the country using import parity pricing. However, the case is not the same for the company holding monopoly. The companies practicing import parity pricing are generally holding the monopoly in the sectors they are dealing with. As they arrange their prices according to import price levels of the products, domestic companies which depend upon these products have to face these high prices. Hence, domestic users are negatively affected from such pricing. Intervention of pricing may have a negative effect upon the profit of Iscor. At that point, Lakshmi Mittal, holding 49.9% stake in Iscor may reportedly re-evaluate taking over Iscor. Mittal's takeover was announced to have been postponed however the Ministry stated that they are in favor of Mittal's takeover of Iscor on the condition that a “developmental pricing model” is established as the prices of Iscor are found to be high by most of the companies in the country. Now, certain companies are worried about government intervention on prices of oil, chemicals and other products.