A recommendation in the draft National Energy Policy of the NITI Aayog to introduce market-linked pricing mechanism for the coal industry in India has come under opposition from the Coal Ministry, presumably in the prospect of Coal India Limited (CIL) losing its pricing power.
The policy is in the favor of doing away with the pricing monopoly of CIL; instead align domestic coal prices with the international rates. This, according to the policy, will provide a level playing field, and help in increasing domestic coal sales, lowering imports.
A policy to help in increasing domestic coal sales has become imperative as the domestic coal stocks became surplus in comparison with consumption in the country.
On the other side, the move will lower the profitability for CIL.
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