CIL needs to up prices to offset imported coal cost
The company, which is struggling to step up production to meet the power sector’s fuel demand, has projected coal import requirement at 18 million tonnes (mt) in the current year (2012-13), 45 mt in 2013-14, 38 mt in 2014-15 and 19 mt in 2015-16. But it expects to be able to meet the power sector’s fuel demand from indigenous production alone in 2016-17.
The company will be required to increase its coal price by 8% in 2012-13, 21% in 2013-14, 16% in 2014-15 and 7% in 2015-16 to absorb the impact of the high cost of imported coal, CIL had said in a recent letter to the coal ministry.
These projections have been drawn based on the assumption that CIL will be able to achieve 8% compounded annual growth rate (CAGR) in production during the current Plan period, compared with the 3.8% recorded in the previous Plan period. CIL will have one notified price for each grade of coal under the proposed price pooling regime despite the necessity of importing coal.
The principal secretary to the PM, Pulok Chatterjee, is steering the effort to devise a price pooling mechanism to help CIL pass through the high cost of imported coal evenly across the power sector.
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