Coal India Limited (CIL) has plans to increase its notified prices for coal once again. It has asked the Ministry of Coal (MoC) for its views on the proposed revision, so as to start the process of increasing the prices of coal supplied by all CIL-subsidiaries.
- The coal company maintains that a quick revisit on domestic coal prices is necessary to assuage its new investors, post the record-breaking recent IPO of the company.
- However, the coal company has proposed to still maintain the differential pricing mechanism for the coal-consuming sectors, so that the burden is less on those that sell their products at a regulated price.
- As proposed by CIL, power, defense and fertilizer units should pay a severely regulated price, with a 40% higher price payable by other sectors subject to market rates for their products.
- This call for price revision stems from an inflationary increase in the price of inputs, rise in international coal prices, forthcoming wage revision for CIL employees and a shortfall in production due to recently-introduced ban on expansion of industrial activities in critically polluted areas and notification of 'no-go' areas for mining activities by the Ministry of Environment and Forests (MoEF).
- In October 2009, CIL increased coal prices by 10% for all grades of coal over the then-existing prices, while for loss making companies, like BCCL and Eastern Coalfields Limited (ECL), a hike of 15% was effected. This, however, excluded grades A and B of coal supplied from ECL`s underground mines to specific customers.
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