State-run Coal India today hiked thermal coal prices for both power and non-power consumers with immediate effect, a decision which electricity producers said would jack up energy prices by up to Rs 0.50 per unit.
Sources indicated that the average price hike could be around 10 per cent but the Indian Captive Power Producers Association claimed that the hike is in the range of 15-20 per cent for G-11 and G-14 grade fuel which would make power costlier by Rs 0.30-0.50 per unit.
The board of Coal India Ltd in its meeting approved revision of non-coking coal prices with effect from January 9, 2018, Coal India (CIL) said in a filing to BSE, without disclosing the quantum of increase.
Power producers, however, said the price hike will increase electricity tariffs.
"This increase for G-11 and G-14 grade (coal) is in the range of 15-20 per cent...It is expected that the coal price increase would result in 30-50 paise/per unit rise in power tariff," Indian Captive Power Producers Association (ICPPA) Secretary Rajiv Agrawal told PTI.
This increase, he said, is over and above 12-18 per cent indirect price increase by introduction of evacuation charge (Rs 50 per tonne), sizing charge and surface transportation charge.
According to Association of Power Producers, thermal coal price rise would amount to power tariff hike of 25 to 30 paise per unit.
"The arbitrary price increases of CIL are burdening the common power consumers. As this increase along with earlier imposition of evacuation charge and increase in surface transportation charge would add about 35 paise in retail (power) tariff," Association of Power Producers Director General Ashok Khurana said.
According to PwC's Kameswara Rao, the higher coal costs will incentivise larger, more efficient plants close to the mines.
Utilities will have take a call on older, inefficient plants, he added.
"Resource companies are raising prices to absorb their own cost increases. The impact is 6-10 p/kWh today but could be lesser as mechanisation grows in future," Rao said.
Coal India was the biggest gainer among Sensex stocks, rising by 5.63 per cent to close at Rs 303.05 on BSE. Trading volume in the scrip also soared today with over 2.90 crore shares being traded on both NSE and BSE stock exchanges.
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