Following new mechanism, Coal India will offer coal for sale to identified non-regulated sectors on price, which will undergo revision every five years.
The centre has decided to supply coal from CIL’s production to non-regulated sector to meet the unmet coal demands. Following it, Coal India is all set to go on with the process and has presented a model of pricing coal available for sale in auction. This will help in aligning the output cost to be incurred in the process, which the centre has designed to ensure coal supply to coal starved non-regulated sector.
Sources say that the new mechanism will help in removing ambiguity in the previous process of determining the prices. Earlier, coal ministry used to offer coal through coal linkages on nomination basis to non-regulated sectors. These sectors include steel and cement, where the mechanism of determining the final prices for coal auction was not organized. On the contrary, in regulated sectors like power, the final prices for coal auction is based on tariff rates provided by electricity boards of respective states.
Presently, ministry is working on all options available to fix the prices for coal auction for these non-regulated sectors, and nothing is finalized yet. There is also a possibility that the end user will have to bear increased output cost incurred during the process.
It should be noted that, in Apr’15, centre permitted CIL to offer 10% ie 55 MnT of its annual production to offer for sale through e-auction, Next, the centre this month came up with a decision to adopt quota system for offering coal to non-regulated sectors namely, iron, steel, aluminum, cement and fertilizer plants.
-sourced
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