Faced with stiff opposition from consumers, Coal India Ltd ( CIL) rolled back the price increase that came into effect after the state-run company switched to a new pricing system in January.
Although the new pricing system will continue, domestic prices will not be linked to global rates. 'The new policy had led to an increase of 5-12% for various grades but de-linking local prices from global rates would help offset a projected 12.5% rise in prices,' chairman NC Jha said.
Coal minister Sriprakash Jaiswal said the new mechanism would be reviewed after assessing the January-March quarter revenue of CIL, which produces about 80% of the country's coal output.
Since January 1, CIL began classifying coal in 17 grades based on gross calorific value, or the amount of heat produced. The earlier grading system was based on 'useful heat value', under which coal was divided into seven categories based on moisture and ash content. But consumers opposed this new mechanism. While small and medium steel and cement industries said they would have to shut shop as prices had gone up by 50% to 140%, power companies said the new policy would result in at least 40% rise in tariffs. Power secretary P Uma Shankar had also told the coal ministry that cost of generating electricity would rise 35% due to the new pricing mechanism.
....more info
Although the new pricing system will continue, domestic prices will not be linked to global rates. 'The new policy had led to an increase of 5-12% for various grades but de-linking local prices from global rates would help offset a projected 12.5% rise in prices,' chairman NC Jha said.
Coal minister Sriprakash Jaiswal said the new mechanism would be reviewed after assessing the January-March quarter revenue of CIL, which produces about 80% of the country's coal output.
Since January 1, CIL began classifying coal in 17 grades based on gross calorific value, or the amount of heat produced. The earlier grading system was based on 'useful heat value', under which coal was divided into seven categories based on moisture and ash content. But consumers opposed this new mechanism. While small and medium steel and cement industries said they would have to shut shop as prices had gone up by 50% to 140%, power companies said the new policy would result in at least 40% rise in tariffs. Power secretary P Uma Shankar had also told the coal ministry that cost of generating electricity would rise 35% due to the new pricing mechanism.
....more info