Buckling under consumer pressure, Coal India Ltd has rolled back the price hike proposed under its new Gross Calorific Value-based pricing mechanism effective January 1.
Coal India will delink the rates from international parity prices, said Mr N. C. Jha, Chairman. This would eventually reduce the prices for different grades of coal. However, the GCV-based grading of coal will continue and the anomalies in the pricing structure will be set right, he added.
Coal India switched to the GCV-based pricing mechanism in line with the international norms and had proposed an average of 12.5 per cent hike in prices.
This had evoked strong protest from consumers in sectors such as power, cement, steel and aluminium. In the earlier Useful Heat Value (UHV) method, the pricing was decided on the ash and the moisture content in coal.
“The new pricing will be revenue neutral for the company,” said the Union Coal Minister, Mr Sriprakash Jaiswal. The new pricing mechanism will be reviewed early next financial year after assessing the performance of Coal India in the January-March quarter, Mr Jaiswal said.
The company has set a production target of 464 million tonnes for 2012-13.
Wage Hike
Meanwhile, the CIL board has reached an understanding with its employee unions to increase total employees wages by about 30 per cent, effective July 2011. About 3.65 lakh employees will stand to benefit from the hike in basic salaries by 4 per cent, besides a 25 per cent increase in gross salaries among others.
The wage revision would result in an additional burden of Rs 6,500 crore, said Mr Jha.
Also, the wage component in the production costs would go up to around 48 per cent from the present 43 per cent.
Coal India shares ended 3 per cent lower at Rs 325.65 on the BSE on Tuesday.
New Chairman
Ms Zohra Chatterji, Additional Secretary in the Coal Ministry, will take up the additional charge of Chairman and Managing Director of Coal India on Wednesday.
Mr Jha, Director (Technical) of CIL, had taken additional charge as CMD last March. He retired on Tuesday.