Power to cost more as coal prices are hiked

Coal India Ltd on Tuesday announced an average 16.7 per cent hike in prices of all grades of coal from midnight on Tuesday.

Announcing this, Coal India Chairman Sashikumar said in Kolkata that the price revision which was effected after two years, was inevitable since international prices had gone up by 100 per cent between August 2002 and June 2004.

Due to the coal price hike, the cost of electricity per unit would be dearer by 6 paise, said Sashikumar.

He said that the price increase was also effected due to rise in input costs in the last two years as well as to ensure better demand management by relating ''our coal prices to international coal prices.''

The last price hike was made in August, 2002.

He said that even after this increase, the price of coking coal would be Rs 850 per tonne, lower than the international price.

The CIL chairman said there would be 50 per cent increase in prices on a small quantity of about one million tonne very prime grade coking coal.

The CIL chairman said that on a small quantity of about one million tonne of very prime grade coking coal, the price increase would be 50 per cent and on about 18 million tonne, the hike would be 20 to 30 per cent.

In respect of non-coking coal where international prices had witnessed a spurt of 100 per cent, ''we are proposing an increase of 20 per cent on about 65 mt prime coal and on a quantity of about 207 mt, the increase will be about 15 per cent,'' he said.

The hike in prices of coal would generate additional revenue of about Rs 150 crore to the company, he said.

The minimum increase on 'F' grade coal would be about Rs 52 per tonne, while the increase on 'A' grade coal would be Rs 290 per tonne approximately, he said.

Citing an example, the CIL Chairman said that the landed cost of coal in Ahmedabad from the Bilaspur-based South Eastern Coalfields Ltd would be Rs 2,300 per tonne, while the landed cost of imported coal there would be Rs 4,000 per tonne.

The price increase would also impact the steel sector as well and the cost of hot rolled coil would go up by Rs 500 per tonne.

Asked whether the price revision was aimed at linking it with the international price, Sashikumar said that it would take a few more years to reach to that stage. ''We cannot suddenly go for a drastic revision. But at some point of time we have to link it with international price. Our coal price is still much lower.''