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| Edited By: Sumit Moitra |Source: DNA |Updated: Mar 18, 2018, 05:41 AM IST
Coal India will increase prices of coal produced by two of its subsidiaries following an impact analysis of the system of grading coal based on gross calorific value, or GCV, implemented in January.
The two subsidiaries are Western Coalfields (WCL) and Eastern Coalfields (ECL).
“The decision to rationalise prices of ECL and WCL has gone to the board, and it has authorised me to do that. When GCV was introduced, WCL and ECL got hit for some grades. We will rectify that soon, within a few days,” Narsing Rao, chairman-cum-managing director, Coal India, told a select gathering of analysts.
The state-owned monopoly has long been exploring ways to compensate the two subsidiaries.
The move will push up prices, and add to revenues.
“There could be some increase. We would be rationalising and that will result in better revenues,” said Rao. “We need to work out the details. But overall there would be increase as decreasing (prices) is not an option.”
The Coal India chief, however, refused to comment on the exact quantum of the price hike on the anvil. “I haven’t looked at the numbers — what they will be post revision. Unless I look at them, I can’t comment,” he said.
ECL is likely to see an increase in the prices of coal being supplied from its Rajmahal mines, said a Coal India official present at the meet. “While ECL has made significant profit of Rs900 crore, its Rajmahal mines operations are losing money.”
Overall, Coal India’s prices have not gone up by more that 3-4% on an average across its mining subsidiaries following implementation of GCV-based pricing mechanism, said Rao.
On e-auctions, the chairman said Coal India would try not to cut down on the high-margin business. “We plan to maintain the same level of quantity for e-auction this year, by offering more and more out of the unliquidated stock, particularly those available at points where coal is not easily loadable.”
As such, a cut-back on the e-auction quantity in a bid to adhere to any government directive to accommodate power plants’ requirements is not a major concern in terms of revenues, he said, adding that Coal India could always effect minor revisions in prices.
The Prime Minister’s Office had earlier directed Coal India to reduce e-auction quantities from the normal 10% to 7% of its total production to meet the power sector’s demand.
