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Government examining passing on cheaper coal benefits to consumers

The government, which is examining the possibility of introducing a mechanism to ensure benefits of cheaper coal from captive mines are passed on to consumers, has decided to constitute a sub-committee to provide information required for the same.

 The decision to form a sub-committee was taken during the meeting of the Inter-Ministerial Committee (IMC), under the Chairmanship of Additional Coal Secretary A K Dubey, to look into the issue.


"The first meeting of the Inter-Ministerial Committee was held.... to examine the possibility of introduction of a mechanism to ensure that the benefit of cheaper coal is passed on to the consumers," said the minutes of the meeting.

 "It was observed that this issue required in-depth examination and analysis with technical inputs on coal blocks allotment, production, demand and supply of coal, quality of coal etc," it said.

 "Thus, it was decided to constitute a sub-committee of technical experts under the chairmanship of Advisor (Projects), Ministry of Coal, which could assist the IMC and provide information/input on the issues," it added.

 Members of the sub-committee include Director, Technical, CMPDIL and representatives of Steel Ministry and Department of Industrial Policy and Promotion.

 The Steel Ministry, which was also a part of the meeting, informed it is difficult to analyse and assess the benefits of charging premium over and above the royalty, which is passed on to consumers.

 This is because the demand and supply of indigenous coal supplied to steel plants along with the linkage will have to be taken into consideration, it said.

 "Similarly, cement sector is also a de-regulated sector in which coal is one of the components as raw material in manufacturing cement. It will be difficult to assess the benefits on account of charging premium, which could be passed on to the end consumer," it said.

Source: The Economic Times