Government
has asked Coal India Ltd to reduce the amount of coal it sells via electronic
auctions to 7% of its output by March 2017, from the current 10%. CIL has also
been asked to increase the amount of coal available for local power producers,
a senior government official said.
“Coal India has been
informally told [by the coal ministry] that it should progressively cut its
e-auction quota in next five years,” the official, who declined to be named.
The coal thus diverted will be
made available to power plants at notified prices, the official said, implying
that the world's largest coal company will take a hit to its profits as its
e-auctions fetch 80%-100% more than annual supply contracts. Coal-fired power
plants that are facing an acute shortage will be benefitted by this step.
Coal India had earlier said in
October that it plans to sell up to 50 million tons through e-auctions this
fiscal year ending March out of a targeted production of 440 million tons.
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