‘Selling imported coal on a notified price by CIL should be implemented’
based on a small discount to import parity price. Being produced only in underground mines the quality of this coal is consistent.
Working out the notified price of imported coal by using the GCV and notified price of these grades as benchmark shall lead to somewhat higher notified prices for imported coal but that will stand to better reason. The rationale would be even better if CIL is allowed to restrict imports to coal of GCV similar to these higher grades.
Would the power producers benefit from price pooling?
Yes. Notifying a price for imported coal by CIL will help the power producer in claiming ‘pass through’ for price variation more easily as is the case with domestic coal. This by itself may allow significant power capacities already set up to generate at much higher capacities in a viable manner. It may also make financial closure and bank financing easier for upcoming power projects.
Undoubtedly, selling imported coal on a notified price by CIL should be implemented at least to the extent of its FSA commitment.
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