CIL raises price by 6% to earn additional revenue

The Dollar Business Bureau

State-owned Coal India Ltd (CIL) has raised its coal prices by 6.29 percent to earn additional revenue of Rs.3234 crore. 

The revision in the prices was announced after the CIL board met on May 28, 2016. The new prices will come into effect on May 30 and are expected to be effective till the end of the current fiscal year.

“The change will be applicable to all Coal India’s subsidiaries and North Eastern Coalfields (NEC) for regulated as well as non-regulated sectors,” the company said in a BSE filing.

This move will enable the company to earn additional revenue of Rs 3,234 crore in the current financial year 2016-17.

The board’s members have agreed to reduce the differential price for non-regulated segment at a rate of 20 percent over the price of coal grades G6 to G17 in the regulated sector for all the CIL’s subsidiaries.

This news came as a surprise to sectors such as power, iron and steel and cement as the price hike in coal will consequently increase the raw material cost for these sectors.

For CIL, the upsurge in prices came at a time when its average realisation per tonne is declining due to lack of demand, specifically from power plants, which already have a bulk of coal with an all-India aggregate stock of 22 days till May 26.

CIL had increased the rates of a particular grade of coal from its mine in Godda district, Jharkhand, in 2014.

Currently, the state-owned miner provides around 17 grades of non-coking coal having gross calorific value (GCV) in the range of 2200 and above 7000 kilo calorie a kg.

Coal India produced 165.24 million tonnes of coal during the fourth quarter ended March 31, 2016, compared to 151.86 million tonnes in the same quarter a year earlier.