CIL urges shelving of pooled price mechanism

Coal India has urged the Planning Commission to shelve its suggestion of pooling coal prices as it will cross-subsidise imports at the expense of industries sourcing their requirement of the dry fuel from within the country.

A Planning Commission panel came out with an integrated energy policy in 2008 suggesting a price pooling mechanism for coal. However, the methodology of the pricing mechanism was not spelt out, a company source told PTI.

CIL chairman Partha Bhattacharya has already approached Planning Commission Deputy Chairman Montek Singh Ahluwalia for doing away with the suggestion of pooled price of coal.

CIL was the of the view that such a mechanism, devised to benefit imported coal users, would ultimately end up in cross-subsidisation to the detriment of users of domestic coal.

The price differential between imported and domestic coal varies from 50% to 75%, depending upon the distance transported.

Although CIL has not imported coal so far, the coal behemoth has already finalised plan to source supplies of the dry fuel from overseas, for which it is about to start the tendering process.

During the current fiscal, India's coal imports are likely to be in the region of 84 million tonnes.

Meanwhile, CIL is apprehensive of a shortfall in coal production due to delays in getting environment clearance for projects.

A coal ministry report said delays in the grant of environment clearances will result in a production loss of 190 million tonnes, valued at Rs 18,000 crore.

However, in a recent meeting between Coal Minister Sri Prakash Jaiswal and Environment Minister Jairam Ramesh, it appeared that the issue of CIL's 17 blocks falling under 'no-go' areas was likely to be resolved in the near future.