Coal India rolls back price hike

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ENS Economic Bureau: New Delhi, Feb 01 2012, 01:06 IST

Amid protests from coal-rich states like West Bengal and Jharkhand, state-run Coal India Limited (CIL) today temporarily rolled back the hike in prices of coal, weeks after having switched over to the new Gross Calorific Value (GCV) based pricing mechanism. Giving the much-needed reprieve to its buyers, CIL said it will delink the rates from international parity prices arguing that this would eventually reduce the prices for different grades of the fuel.

The new pricing policy, which was introduced on January 1 would come up for review after March, had led to an increase of 5-12 per cent for various grades, but outgoing CIL chairman Nirmal Chandra Jha said delinking domestic coal prices from global rates would help offset a projected 11-12 per cent rise in prices to be implemented with retrospective effect from January 1.

Asserting that switching over to GCV-based grading of coal from the Useful Heat Value (UHV) mechanism will continue, Coal Minister Sriprakash Jaiswal said, the GCV mechanism will be revenue neutral and a review would be done will be done after March. “Consumers from various sectors including power and cement have protested against the GCV system saying it implies a huge revenue outgo for them. So let us see under the new system how the situation grows,” Jaiswal told The Indian Express.

Opposing the GCV system, the West Bengal government described it as “worst and anti-people” and has demanded that the Centre defer its implementation until a regulator for the coal sector is in place. “It would be

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