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Pratim Ranjan Bose

Kolkata, Aug 16Reduction of floor prices fails to boost sales of coal through e-auction of Coal India Ltd during June and July. In an effort to increase the availability of coal and counter the inflationary pressure on the economy, CIL decided to offer 40 million tonnes of coal through e-auction between May and July 2008. This was higher than the projected offering for the entire 2008-09.

The offer was doubly sweetened in June this year by reducing the floor price of e-auction from 30 per cent above the notified price to a mere 5 per cent.

None of the efforts, however, succeeded in lifting the demand for coal in the auction.

According to sources, as against an offering of 11.5 million tonnes, 5.3 million tonnes were sold in May. In June, 15 million tonnes were offered on a reduced floor price for participation. However, sales dropped to approximately four million tonnes.

The demand situation worsened in July when only 3.9 million tonnes out of a total offering of 13 million tonnes found bidders. The actual sales, however, were less than 3.9 million tonnes as the successful bidders did not lift the allocated quantities.

While CIL continues to offer higher quantities in August, sources told Business Line that there was hardly any possibility of improvement in actual sales till the onset of the dry season. “Against an offering of 43 million tonnes, we could sell approximately 15-16 million tonnes between April and July,” a company source said adding that the low sales compared to the offering may help CIL to silence criticisms on lower availability of coal compared to the demand in the country.

Sources among consumers, however, feel that the exercise was bound to fail as higher quantities were offered during the slack season.

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