CIL coal price tweak to impact power tariff: Source

Revision of coal price will fetch CIL additional revenue of about Rs 3,900 crore

Coal India Limited's (CIL's) price rise will increase power tariff as impact on regulated sector coal is 8%.

While the overall price hike would be about 6.2%, the effect on regulated (power) sector would be about 8%, sources told PTI.

CIL has revised low grade coal price up to 19%. Revision of coal price will fetch it additional revenue of about Rs 3,900 crore.

But, the soft global coal forced CIL to stay competitive with imported coal and has reduced price between two and 29%.

Sources said, "existing price of G1 to G-5 has been reduced from 2% to 29% to make it competitive with international coal."

Coal India has also waived the charges levied for supplying high grade coal above certain trigger levels to encourage higher consumption by its consumers.

However, to offset the loss of revenue in higher grades, price of G-6 to G-17 has been upwardly revised to the extent of 13% to 19%.

After effecting such revision, price of CIL low grade coal discount ranges from 30-40% in comparison to imported coal of similar calorific value, CIL officials said.

Keeping in view the ensuing linkage auction, which itself would indicate a reflection of the market price and inroads of imported coal and pet coke, the prevailing 35% mark-up for non-regulated sector been reduced to 20%.

The prevailing add-on of 20% over the notified price for regulated sector in case of Western Coal fields is being continued, the miner said.

However, to arrest revenue loss of Eastern Coalfields Limited due to sharp fall in the price of higher grades of coal, the Board has upwardly revised the prevailing add-on in the coal of Rajmahal Mines, CIL said.

Coal India officials said that in the last three years, consumer price has increased due to rise in rail and road transportation cost, cess and excise duties.