Following pressure from power distribution companies (Discoms) and consumer groups over steep correction in international prices, government has directed Coal India to bring down prices of some grades.
Coal India Ltd (CIL) is likely to revise its coal prices downwards as global markets are grappling with a secular downswing in price of the fossil fuel.
Following pressure from power distribution companies (Discoms) and consumer groups over steep correction in international prices, government has directed Coal India to bring down prices of some grades.
Officially, the exercise is being called an effort to realign prices of coal to its Gross Calorific Value.
"Lot of stakeholders including consumer organisations and my own studies show that some grades of coal are not priced properly. So, we need to rationalise the prices to make them linear with their Gross Calorific Value. Coal India should find some rational pricing structure for the benefit of Discoms and consumers," coal and power minister Piyush Goyal said on Friday.
Coal prices are on a downswing since the beginning of 2015, and since February, price of benchmark Newcastle 5,500 kilo calorie variety has dropped from $54 a tonne to about $42 a tonne by the middle of August.
"Asian thermal coal prices have been on a downtrend since the start of 2015, mainly due to oversupply and weak demand. August, in particular, has not been a friendly month for coal markets in the region. Suppliers are being battered by the Chinese yuan's devaluation, low appetite for imports in China and India, the new income tax imposed on Indonesian miners," energy analyst Platts has said.
Goyal explained that the price revision would be done keeping in mind Indian realities and would not be aligned to global prices. "It will not be aligned with international prices as they keep fluctuating and may even go up in the future. Coal price would be aligned with the GCV so that consumers can get coal at a rational price," he said on the sidelines of BCCI Environment and Energy Conclave.
While global prices continue to fall, domestic production is going up at a rate not seen before.
"Coal India has achieved output growth of 10% in the first four months. Country has now surplus power and surplus coal," the minister said.
As a result, imports are coming down with country's largest power producer NTPC staying away from import tendering since the beginning of the current fiscal, Goyal said.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "coal")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}