CIL to come up with a new model for price pooling

Coal India (CIL) is working on a new model for price
pooling that will allow power generators to buy a mix of imported and
domestic coal at one price. 

Officials at the State-run miner said the price derived by
the new formula will have the cost of imported coal factored into it. 

The earlier model, proposed by the Central Electricity Authority, involved
sharing of 25% of the cost of imported coal equally by all power generators,
which would have been eventually passed on to consumers. The remaining cost of
imported fuel was to be borne by individual power generators. 

The government had asked Coal India to come up with an alternative price
pooling mechanism after the one suggested by CEA was rejected by most power
distribution companies. Coal India, however, said the new model needs some
fine-tuning. 

According to a senior official from CIL, “We are working on it and it will
have to be fine tuned to include all possible scenarios. We are proposing this
new model, which will have to be discussed with CEA and the distribution
companies. The model will be submitted soon to the coal ministry, which will
take it”.

It is, however, still not clear how Coal India will arrive
at one price for the different categories of coal produced by its mines.