The pricing methodology for the domestic Non Coking coal in India will undergo a complete change from the onset of the next month. The state-run Coal India Limited (CIL) today organized a consumer awareness meet at its headquarters in Kolkata to educate the coal consumers in the country about the paradigm shift in the pricing norms to come into vogue from Apr’18.
With effect from 1Apr’18, CIL will price its Non Coking coal on the basis of the intrinsic calorific value, a marked departure from the decade old grade based pricing system. According to a CIL executive, the rationale behind moving to the new pricing system is to bring in transparency and value for the coal customers in the country. In simple terms, customers will pay for the exact quantity of energy of the coal under the new pricing norms. That means, the higher the energy content of the coal, the more is the price; and vice versa. Moreover, the new pricing system is in line with the global practices, the CIL executive said.
The corresponding nomenclature for the coal price unit pertaining to the new pricing norms will be in INR MnKCal/KG (or multiple of INR Kcal/KG).
In addition to the shift over to the new pricing practice, CIL will also set into motion stringent practices to maintain high coal quality for deriving value to the customers. In this context, a senior CIL executive said that every coal consignment will be sampled to ascertain the Gross Calorific Value (GCV) content before dispatching to the customers; and the GCV will be calculated on dry basis,free of surface moisture.
“Let us firstly move on to the new pricing system,” said a senior CIL executive. “And, thereafter we will go on fixing the bugs which will come on the way,” he further added.
During the interaction between the CIL authorities and the consumers, the demand scenario for coal was also articulated.
In the recent past, demand for Non Coking coal was substantially strong due to the incremental consumption by the coal-fired thermal power plants, which were forced to operate at higher rates due to the stronger demand for electricity in the country. Since, there was no rise in the operating capacity of the hydro, nuclear, solar and wind power plants, the onus of the higher electricity demand in India had fallen upon the thermal power plants—triggering higher coal demand.
The CIL authorities also stated that the new pricing policy will not be applicable for Coking Coal, which will be priced in accordance with the existing norms.
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