cil coal price hike
Price hike may not affect those using grade

E and F coal
Yogindra Mohan

Patiala

The Tuesday’s revised coal price hike by the Coal India Ltd (CIL), effective from January 1, may not have major price increase on power sector consumers using grade E and F coal.

The CIL announced that new GCV-based grading of coal will continue as this mechanism is in line with the international norms. Last month, an average price increase of 12.5 per cent was announced and now it is revenue neutral for the company.

The CIL decision to benchmark pricing for non-coking coal to gross calorific value (GCV) from the current useful heat value (UHV) based gradation is likely to have a mixed impact on the consumers’ wallet, especially in the power sector.

There will be different price increase for different consumers in power sector which consumes 70 per cent coal mostly of E and F grade.

Price increase is likely to sharpen for the highest GCV bands within the E and F grades. Further, all the subsidiaries of CIL will have uniform pricing system.

Those power companies getting coal from Western Coalfields Limited (WCL) and Eastern Coalfields Limited (ECL) would gain while consumers of Mahanadi Coalfields Limited (MCL), South Eastern Coalfields Limited (SECL) and Northern Coalfields Limited (NCL) would have to pay more.

Power companies using better quality coal for blending will have to pay more as price increase for A to D grades will see an increase of 80 per cent.