Pricing power on the anvil for coal regulator
The move is likely to trigger concerns within the rank and file of the world’s biggest coal miner, as it virtually amounts to clipping CIL’s wings in deciding the pricing mechanism, even as some officials say that the ministry is playing into the hands of the power ministry. Their apprehension comes close on the heels of the power ministry demanding that the proposed coal regulatory authority be empowered to decide on the pricing to benefit electricity generating companies.
In a December 13 note to the Group of Ministers (GoM), which is currently deliberating on the contours of the proposed regulator, the coal ministry stated that its experience indicates “the method of price fixation adopted by CIL is linked only to increase in the wages of its employees, which needs to be corrected”. While CIL can continue to fix prices of its produce, it must do so in a rational, scientific and transparent way, while the methodology of doing so would be in the domain of the regulator, it has argued.
“To counter the effects of monopolistic producers like CIL, a mechanism is required to ensure supply of good quality
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