CIL changes its pricing policy for non-coking coal

New Delhi: The Coal India Limited (CIL) has come up with a new pricing policy since Tuesday. In an alignment with global practices the decision had been taken and also to make the system transparent, simpler and consumer friendly.

The coal price will now be based on 'Per unit of calorific value of coal' (Rs/Kcal). The ministry officials mentioned that though Wholesale Price Index (WPI), Consumer Price Index (CPI) as well as prices of coal have increased significantly over last couple of months, but CIL officials mentioned that it has managed to rationalise the pricing policy in the larger interest of the country.

Now, CIL has offered heavy discount to its long term consumers varying from 44 per cent to 64 per cent depending upon gross calorific value (GCV) as compared to Indonesian coal. Now a consumer will have to pay Rs. 144/ton lesser for coal having GCV of 6701 Kcal and "therefore for every 100Kcal reduction in calorific value of coal, the consumer will benefit by Rs. 48/ton for coal having GCV in the range of 6250 Kcal to 6850Kcal," asserted further.

In addition, the new pricing system enables coal consumers to calculate the basic price of non-coking coal of any mine of CIL based on its GCV and that makes the pricing system much simpler and transparent. The prices of 7 grades have been reduced and in some cases—the reduction even to Rs. 162/ton.

The state-controlled coal mining company also mentioned, "Under this pricing policy, the practicing managers down the line will naturally pay more thrust on quality since a marginal improvement even by 1 Kcal will fetch additional revenue to the individual mine and will have a distinct impact on the bottom-line of the unit."

Recently total 7300 crore annual expense of Coal India Limited have been increased with annual salary hike of workmen (Rs.6350 crore) and of Executives (Rs.950 crore). Therefore, the company officials also feel that the growing demand of coal will also help in recovering the backlog. "CIL's financials are likely to maintain its luster," a release of the coal company mentioned.