Power producers could see an 8-21 per cent increase in coal
price if the revised mechanism for price pooling is implemented.
Coal India and Central Electricity Authority (CEA) have
worked out a new scheme of price pooling. According to this, the differential
between higher price of imported coal and indigenous coal is to be spread over
the entire domestic coal grades. Simply put, while the end consumer will pay
single price, the power producers will have to bear the burden of differential
between imported and indigenously produced coal.
As per estimates, this spreading of additional cost will
result in increase of domestic coal price of about eight per cent (2012-13), 21
per cent (2013-14), 16 per cent (2014-15) and 7 per cent (2015-16).
This model is proposed to keep the price of imported coal at
the same level of indigenous output. However, prices can go up further if Coal
India fails to achieve the production target of eight per cent compounded
annual growth rate (CAGR).
Therefore, it is yet to be seen if all stakeholders agree to
the contentious issue of price-pooling.
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