Union Coal and Power Minister Piyush Goyal today asked Coal India to rectify the anomalies in its pricing structure arising out of the fall in global prices.

“With international prices on the decline, we have discovered certain anomalies in the current pricing of various grades of coal the company sells. It will now be corrected,” the Minister said on the sidelines of an energy conclave organised by the Bengal Chamber of Commerce & Industry in Kolkata on Friday.

Though Goyal did not give details on how the prices would be ‘corrected’, sources say following the meltdown in global prices, CIL’s top grade coal became costlier than the landed cost of imported fuel.

Ideally such high calorific fuel, consumed mostly by industries other than power, must be priced 15 per cent lower than the imported coal of corresponding variety. CIL’s failure to adjust prices gave rise to the anomaly. Under pressure from industrial buyers, the company now wants to reduce the prices of top grade fuel and, rationalise the revenue loss by raising the prices of lower grade thermal coal used in power generation. The lower grade fuel is sold at a heavy discount to price of imported coal.

However, the proposal has hit a couple of hurdles, the most important being the absence of independent directors on the board.

The government removed all the independent directors in July last year and the positions are still vacant. CIL is also concerned about the impact of the proposal on West Bengal-based mining subsidiary Eastern Coalfields, which posted profits recently.

ECL has a maximum share of high calorific value and low-ash fuel available in the country. The reduction in prices of top grade coal could hit the subsidiary’s profits.

Linkage auction Meanwhile the government shifted the timeline for fuel ‘linkage auction’ to March 2016, which is almost a year behind the initial deadline of June 2015.

The auction would have brought additional revenues to CIL. Responding to a query, Goyal said the government has time till March 2016 to conduct the auction.

“We have lot of time. We don’t want to rush through,” he said.

Earlier in April, Coal Secretary Anil Swarup said the first such auction would be held by June 30. The proposal faced stiff resistance from the consumers.

Given the number of power stations lying idle, the Minister said efforts are on to improve demand by strengthening the State government-run distribution utilities, expanding the consumer base through rural electrification and higher industrial growth.

He, however, reiterated that the government was not considering any financial bailout for discoms. The Centre, he said, is ready to extend technical help.

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