Power generating companies and coal traders have welcomed
Coal India Limited (CIL)'s move to withdraw rise in coal prices.
However, they have sought clarity on the rollback as contradictions
are being seen in CIL's logic over revenue gain through price revision. Soon
after switching over to a GCV-based pricing in December, Mr Jha said that there
will be minimal revenue impact on the company. But within two months, the same
management has admitted to a 12.5 per cent revenue gain and cut back prices.
A close scrutiny of prices of different collieries indicate
that prices of few grades of ECL & SCCL mines are fetching lower prices as
per the GCV mechanism. Grade A and B of ECL and grade B,D, E of SCCL stand to fetch lower prices as per the new prices.
Lower price for coal will not only impact the Company's revenue but would also lead to lower royalty
earnings for the respective StateGovernment
In the new price regime, between 3 grades (each
separated by 300 kcal a kg bandwidth) between GCV 5500-6400, prices vary from
Rs 1,450 a tonne to Rs 3,970 a tonne, indicating distinct possibilities of
major revenue loss in case of grade slippage.
The mapping of grades from UHV to GCV still lacks clarity
and the assessment of actual impact can only become clear once CIL comes with revised policy in March. However, the hike in Coal prices is seen for sure only the magnitude may be less, say Industry Experts.
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