Coal India hikes prices in select Western blocks by 10-15%

Development comes after CIL rolled back hike in prices of coal under its new pricing mechanism in wake of protests by consumers

State-run CIL has hiked the prices by an average of 10-15% for non-coking coal mined from selected blocks in Western Coalfields.

The development comes after Coal India (CIL) rolled back the hike in prices of coal under its new pricing mechanism in the wake of protests by consumers.

"The prices of non-coking coal produced by Western Coalfields (WCL) fixed on GCV (Gross Calorific Value) basis ....Stands revised with the approval of the competent authority," CIL said in a notification dated June 20.

The increase in the prices came into effect from midnight of June 21, it said.

"The prices ...Shall be the pithead run of mines prices for non-coking coal produced by WCL on rupees per tonne basis and shall be applicable with effect form 00.00 hour of 21.6.2012," the notification said.

Consequently, non-coking coal exceeding 2,200 Kcal/Kg and not exceeding 2,500 Kcal/Kg GCV is priced at Rs 430 per tonne for power utilities. Sectors other than power utilities pay Rs 580 per tonne for the same grade.

An official in WCL said the increase in prices is an "attempt to restore original price what used to be earlier."

He said that before the new pricing mechanism came into effect we were getting good price for coal. But after the new pricing mechanism was implemented we were suffering losses to the the tune of Rs 340 crore.

However, the increase in the prices of coal for selected blocks at Eastern Coalfields (ECL), a CIL subsidiary, was still on the cards, an official with ECL told PTI.

"On an average the coal prices for select blocks of ECL were likely to be hiked by 12%," he said.

Earlier, a senior official with CIL had said the main reason for price rise was to cover the loss after rollback in coal price hike following shifting to the new international pricing regime.

The move would have a direct impact on power costs in the western and eastern parts of the country.

Cost of power generation by NTPC's Farakka and Kahalgaon units may rise following the hike in prices.

The price increase would also help CIL to turnaround the subsidiaries.

The new pricing policy had led to a 5-12% increase in prices of different grades of coal which had to be rolled back in January.

CIL had shifted to a new pricing mechanism from January 1. Under this system, prices are linked to the actual calorific value or quality of coal.

Till December 31, 2011, CIL followed a pricing mechanism based on the Useful Heat Value (UHV) of coal, which deducted ash and moisture content from the standard formula.