Financial Daily from THE HINDU group of publications
Friday, Apr 19, 2002
Financial Daily from THE HINDU group of publications Friday, Apr 19, 2002 |
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Industry & Economy
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Coal Coal India likely to hike prices soon Badal Sanyal
KOLKATA, April 18 COAL India Ltd (CIL) is expected to effect a moderate increase in the price of all grades of coking and non-coking coal soon as the state-owned coal major feels that a price revision is urgently required to neutralise the impact of additional input costs on production. The central marketing division of CIL has begun the price revision process, which is to be completed within a month. As desired by the Union Minister of Coal and Mines, Mr Ram Vilas Paswan, CIL is expected to finalise uniform prices of all grades of non-coking coal for consumers in the core and non-core sectors within a month or so. Confirming the company's price revision move, CIL's Marketing Director, Mr Sashi Kumar, told Business Line that the exercise was overdue. All production subsidiaries of CIL, except Eastern Coalfields Ltd (ECL), had last increased prices in February 2001. In a market-driven economy, coal companies were free to revise prices to ensure their commercial viability. Hence, the decision to revise prices of coal to neutralise the impact of input costs on production, over which coal companies do not have any control. Mr Kumar said that CIL was aware about its monopoly status as producer and supplier of coal in the country. The organisation was equally aware of limitations in revising prices. A steep hike of prices might not be absorbed by the market, particularly when coal consumers were free to import coal under OGL. He said that CIL was not worried about imports of particular grades of coal which the domestic coal companies could not produce. The country imports on an average 22 million tonnes of coking and non-coking coal per annum. The volume of imported coal was likely to increase marginally, which might not affect domestic coal companies in determining their coal prices, he felt. He, however, reiterated that prices would be revised in such a manner that no bulk consumers could challenge such revision in the court of law.
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