Coal Indias new pricing policy to hit consumers

BHUBANESWAR: As if the last year hike was not enough, the Coal India’s announcement of new pricing policy for upward revision in the prices of different grades of the fossil fuel has come as a shocker. Mahanadi Coalfields Limited (MCL), one of the seven subsidiaries of Coal India Limited (CIL), the largest coal miners of the world, hiked the prices of thermal grade coal in February last year despite the fact that power, defence and fertiliser sectors were kept out of the purview of price hike.The second hike in coal prices was announced at a time when the State is reeling under power crisis triggered by shortage of coal.Although the details of the new pricing method is not known, industry sources said that further price hike in the coal will hit the consumers hard.‘Any revision in the prices of coal will be automatically passed onto the consumers,’ said a senior officer of the state-owned Orissa Power Generation Corporation (OPGC).There will be no immediate impact on the consumers as the bulk and retail power tariffs have been fixed by the Orissa Electricity Regulatory Commission, the sources said adding, the fuel price hike will be passed on to the consumers during the fixation of tariff for the next financial year.The regulatory commission is in the process of finalising the annual revenue requirement (ARR) for the distribution companies and Gridco, the bulk supplier of power to the State.MCL is reported to have increased the price of ‘E’ grade coal by 21 per cent, ‘F’ grade by 19 per cent and ‘G’ grade by 23 per cent. The average hike in the three grades is 21 per cent. The three grades of coal are mostly used for thermal power generation and abundantly available in the state.Captive power plants (CPPs) having coal linkage with MCL are not getting adequate supply as per their fuel supply agreement. The price difference between linkage coal and coal provided through e-auction is huge.Besides, the common complaint against MCL is that the coal supplied through e-auction route is much inferior quality despite the fact that the price of auction coal is more than double.