Thaindian News

New Delhi, Jan 31 (IANS) Following opposition from several users, state-owned Coal India (CIL) Tuesday decided to roll back the prices of the commodity it hiked earlier this month.

CIL had hiked coal prices under a new pricing mechanism from Jan 1 under which the prices were linked to the quality of coal. The move had sparked off protests from power, steel and cement firms.

“The overall price increase that was coming was about 12.5 percent since there was a huge reaction, we have completely withdrawn that pricing,” N.C. Jha, CIL chairman, told reporters.

The coal mining major had shifted the price determining method from a useful heat value (UHV) mechanism to gross calorific value (GCV).

The company will now de-link the rates from international parity prices and eventually, this will reduce the prices for different grades of coal.

The reduction in prices will be with retrospective effect from Jan 1 and CIL will review the system after March, Jha added.

Speaking on the GCV mechanism, Coal Minister Sriprakash Jaiswal said: “Our country is not in a position to increase power prices.”

Earlier this month private power producers had met with senior ministers of the government and Prime Minister Manmohan Singh seeking redressal on several issues, prime among them being coal shortage and pricing.

“When we made a switch to GCV system, there was perhaps an error by Coal India and prices for coal went up. It could have impacted the cost of power,” Jaiswal told reporters.

Coal fuels more than half of the power generation in the country. Although India has 10 percent of the world’s coal reserves, miners have found it difficult to get approvals given the time it takes for environmental clearances and land acquisition approvals.