Business Standard reported that forced to cut the volume of coal sold through electronic auction, government-owned CIL is likely to go for a rise in the notified price for sales under fuel supply agreements with power companies.
The company bought peace with the Union coal ministry by agreeing to almost halve its e-auction sales at 30 million tonnes this year, to make more coal available for the fuel-starved power sector.
The coal ministry in a communication to the Prime Minister's Office however, said that this would come at a cost, with a rationale for a rise in the price of what is sold to companies in the sector.
Mr Piyush Goyal, Union coal and power minister directed CIL to cut its e-auctions by more than 50% to 25 million tonne in 2014-15 from 58 million tonne last year. This had been initially opposed by CIL's board of directors.
The process of reducing these sales is on. The e-auction sales rose 30% over a year before to 14.65 mt in the April-June quarter but sources said that it dropped to 3 million tonne in the next 2 months, July and August.
Officials said that CIL's loss of revenue due to lower e-auction sale would be around INR 2,000 crore this year. Hence, the suggestion on compensation with a price rise was mooted by the coal ministry.
A source said that “The ministry has sent an impact assessment file, which clearly says there would be 'price rationalisation' of the coal sold under notified prices to neutralise the revenue loss.”
CIL itself would not comment.
Amid differences between the coal ministry and CIL over the matter, the PMO had earlier asked the ministry to assess CIL’s concern before taking a decision.
In its response to PMO, the ministry has suggested price rationalisation.
In 2013-14, CIL earned INR 12,767 crore from e-auction sales, with average realisation of INR 2,196 a tonne. This was 14%t higher than the INR 11,148 crore in 2012-13.
Source – Business Standard
The company bought peace with the Union coal ministry by agreeing to almost halve its e-auction sales at 30 million tonnes this year, to make more coal available for the fuel-starved power sector.
The coal ministry in a communication to the Prime Minister's Office however, said that this would come at a cost, with a rationale for a rise in the price of what is sold to companies in the sector.
Mr Piyush Goyal, Union coal and power minister directed CIL to cut its e-auctions by more than 50% to 25 million tonne in 2014-15 from 58 million tonne last year. This had been initially opposed by CIL's board of directors.
The process of reducing these sales is on. The e-auction sales rose 30% over a year before to 14.65 mt in the April-June quarter but sources said that it dropped to 3 million tonne in the next 2 months, July and August.
Officials said that CIL's loss of revenue due to lower e-auction sale would be around INR 2,000 crore this year. Hence, the suggestion on compensation with a price rise was mooted by the coal ministry.
A source said that “The ministry has sent an impact assessment file, which clearly says there would be 'price rationalisation' of the coal sold under notified prices to neutralise the revenue loss.”
CIL itself would not comment.
Amid differences between the coal ministry and CIL over the matter, the PMO had earlier asked the ministry to assess CIL’s concern before taking a decision.
In its response to PMO, the ministry has suggested price rationalisation.
In 2013-14, CIL earned INR 12,767 crore from e-auction sales, with average realisation of INR 2,196 a tonne. This was 14%t higher than the INR 11,148 crore in 2012-13.
Source – Business Standard
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