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Coal price rationalisation likely early next year

State-run miner Coal India may take a decision on price rationalisation of various grades of the fossil fuel early next year.

"The discussions on the same are underway and by the end of the ongoing fiscal hopefully a decision would be taken with regard to price rationalisation," a source privy to the development said.

The miner is looking at rationalising prices of coal in grades ranging from G1-G5.

When asked about the proposal, Coal Secretary Anil Swarup told PTI that the price rationalisation proposal was on the cards as some issues have been raised with regard to pricing of the fossil fuel.

"It shall be our endeavour to see that pricing of coal is rationalised because there are some issues relating to pricing of coal and Coal India is presently engaged in a debate on that," the Secretary said.

Refusing to elaborate on the same, the secretary said that "what will pan out difficult for me to say but they (Coal India) are looking at it."

Coal and Power Minister Piyush Goyal had earlier said that the Centre needs to rationalise prices of certain grades of coal as per gross calorific value (GCV) but there is no need to align them to international rates.

"Indian coal prices were never linked to international prices. They were by and large set to Indian requirement and kept very reasonable over the years. And therefore the fall in prices internationally has not really affected the country's coal prices," he had said.

"However, a lot of stakeholders, particularly consumer organisations and my own studies show that certain grades of coal are not being priced properly. So we need to rationalise the prices to make them linear based on the gross calorific value," he had said.

At present, average international (Free on Board) coal price was quoted at USD 52 per tonne. On the other hand, average domestic prices of coal were in the range of Rs 1,100 to Rs 1,200 per tonne.

Asked whether the rationalisation of coal prices would be aligned to that of the international market, Goyal had categorically said, "No it will not be aligned with international prices. Those prices keep on fluctuating and they may even go up in the future. It will be aligned to the GCV of the coal so the station heat rate of the power plant or the consumers in the other sectors get coal at a rational price."

source: http://economictimes.indiatimes.com