Coal India Ltd. raised prices; coal fired thermal power to get dearer

15 January 2018

Earlier in the week, state-owned miner Coal India Ltd. revised its thermal coal prices upwards for both power and non-power consumers with immediate effect. As per the independent sources, the average price hike could be around 10%, but the most widely used grades in power generation (G11 to G14) have seen the increment of 15-20%.

Coal India’s board in its meeting approved revision of non-coking coal prices with effect from January 9, 2018, Coal India (CIL) said in a filing to BSE, without disclosing the quantum of increase. It is anticipated that this upward revision in the fuel cost would result in increase in the power prices by up to Rs 0.50 per unit.

According to Association of Power Producers, thermal coal price rise would amount to power tariff hike of 25 to 30 paise per unit. Meanwhile, Indian Captive Power Producers Association (ICPPA) suggested that the hike is in the range of 15-20% for G-11 and G-14 grade fuel which would make power costlier by 30 to 50 paise per unit.

World’s largest coal miner further indicated that this price revision will result in an incremental revenue of Rs 1,956 crore for the remaining period of 2017-18 fiscal while total revenue will be Rs 6,421 crore.

Recent increment in prices is over and above 12-18% indirect price increase by introduction of evacuation charge (Rs 50 per tonne), sizing charge and surface transportation charge, introduced by Coal India in the month of December 2017.

Furthermore, Coal India also indicated that the sales bills will be raised on GCV (kcal/Kg) basis with effect from April 1, 2018 and the present mode of raising bill would continue till then.