Coal India may go for price-pooling of imported coal

3 JUL, 2012, DEBJOY SENGUPTA, ET BUREAU
KOLKATA: Coal India Limited (CIL) is open to the idea of price-pooling of imported coal and will iron out the issues involved with Central Electricity Authority, Central Electricity Regulatory Commission, the coal ministry, the power ministry and state utilities in a meeting to be held during the second week of this month.

This assumes importance because the private producers have been demanding it for sometime now and a price-pooling has been proposed by the prime minister's office (PMO) recently.

Coal India cannot meet the coal demand from power producers single-handedly and the country is slated to see a shortfall in supply in the next few years. This shortfall has to be met through imports which typically costs more than double the price at which coal is imported.

Pricey imported coal increases cost of generation of power and the power producers have been demanding a price-pooling mechanism where the average price of coal sold by Coal India will be increased to accommodate use of imported coal.

"The concept has been tabled and it will have to discussed and debated to arrive at the mechanism and the method of calculation of the pool price.

For example, CIL's coal with gross calorific value (GCV) of 4,000 is about 1,100 per tonne and imported coal with GCV between 5,000 and 8,000 will be of higher price. While CIL will be supplying about 350 million tonnes to the power producers another 70 million tonnes may be required for imports.

Pooling will, through a fair calculation, result in uniform but marginally higher price for the combination on a per tonne basis," S Narsing Rao told ET.