Industrial Units Make Case for Rollback of Coal

BALASORE: The recent hike in coal prices by Coal India Limited has rung the alarm bells for the industrial units here which are already reeling from power cuts and low voltage. The CIL,

Published: 24th January 2012 04:44 AM  |   Last Updated: 16th May 2012 06:20 PM   |  A+A-

BALASORE: The recent hike in coal prices by Coal India Limited has rung the alarm bells for the industrial units here which are already reeling from power cuts and low voltage.

The CIL, which had hiked the coal price on February 26 last year, has once again raised the price with effect from January 1. The second hike in 10 months has a cumulative effect of price increase of nearly 230 per cent in type D and E grade coal and the minimum price increase is around 175 per cent.

The Industries’ Association of Balasore claimed that CIL made the steep hike on the pretext of changeover from the system of useful heat value (UHV) to gross calorific value (GCV) in tune with international practices.

While the Ministry of Coal has termed this change as price neutral and CIL promised that there would not be any major price change, it however is indispensable in the course of change in pricing mechanism, the association said.

President of Balasore Chamber of Industries and Commerce (BCIC) Himansu Kumar Das said on both the occasions of price hike CIL has discriminated and segregated Captive Power Producers (CPPs) from the rest of power producers like Independent Power Producers (IPPs) and public utilities, in contravention to the norms of the new coal distribution policy of 2007.

Entrepreneurs viewed that the change to GCV-based system has been done without a proper technical and commercial mechanism. The price fixation through GCV suffers from the infirmities of unequal comparison of quality and price of Indian coal vis-a-vis the imported coal resulting in arbitrary increase in prices of domestic coal.

Das said when the Indian economy is reeling under severe inflationary pressure, a sudden steep increase in the price of coal would be counter productive. “Any substantial increase in coal cost will have a cascading effect on the industrial units and economy,” he said demanding immediate withdrawal of the CIL notification and to treat the CPPs, IPPs and power utilities on par for all purposes.

Meanwhile, the industrial association has written to Union Coal Minister Shriprakash Jaiswal along with Minister of State for Coal Pratik Prakashbapu Patil, Coal and Mines Secretary Alok Perti, Chief Minister Naveen Patnaik, Steel and Mines Minister Raghunath Mohanty and Principal

Secretary to Industries Department T Ramchandru seeking rollback of coal price hike.

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