Northern Coalfields Ltd (NCL), following in the footstep of MCL has increased the reserve price of coal in two of its e-auction schemes.
The coal company has raised the reserve price from 10% to 30% in its upcoming special forward and exclusive e-auctions. While no price revision was notified for monthly spot e-auctions.
Earlier, MCL had increased reserve price by 10% for various e-auctions.
NCL’s Upcoming E-Auctions:
Exclusive E-Auction: The auction scheduled on 30 Apr’19, is envisaged as the phase-I of the exclusive auction scheme for 2019-20 period.
It entitles coal sales for all non-power consumers in India, desiring supply for a longer period for own consumption.
NCL had offered 1,200,000 MT in the auction, wherein the reserve price for coal from various sources had been set 30% over the CIL notified price for non-power sector.
Special Forward E-Auction: The auction scheduled on 6 May’19, has been envisaged as the phase-I of the special forward scheme for 2019-20 period. It entitles coal sales for all power consumers in India, desiring supply for a longer period for own consumption.
NCL had offered 1,200,000 MT in the auction, wherein the reserve price for coal from various sources had been set 30% over the CIL notified price for power sector.
Both these auctions allow end-users a flexible period of lifting, wherein booking period shall be valid up to 16 Aug’19. However, Monthly scheduled quantity (MSQ) for the month of Aug’19 will have an additional 45 days lifting period beyond 16 Aug’19.
Voices Raised over Price Revision:
The price revision inflicted by MCL and NCL have resulted in a net increase in reserve price for the e-auctions.
Media reports have claimed that end-user plants comprising of power producers have requested the coal ministry to direct CIL to “maintain the reserve price at 10% so that stressed power plants can operate reliably and cost effectively”.
Notably, coal supplied under various e-auctions have been dwindling, wherein higher premium have been paid over the notified price last year.
During FY19, coal allocation under special forward e-auction had fell 6% Y-o-Y to 27.14 MnT as against 28.93 MnT in FY18, while garnering 72% increase over the notified price.
Allocation in exclusive e-auction was 11.36 MnT in FY19, fetching 58% premium over notified price.
The revised rates in these e-auctions would further impact the operating cost of the end-user plants dependent on them.
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