CIL hikes coal prices to keep pace with rising costs
Electricity consumers are in for another price shock. Beginning May 30, Coal India increased prices of lower grade coal (G6 to G17) by 13 to 19 per cent.
This is the first broad-scale price revision by the company after three years.
Prices of the most consumed varieties of G11 to G13 moved up by ?100-150 a tonne, translating into a roughly eight paise a unit impact at the distribution end.
The consumers of Western coalfields will pay 20 per cent higher price and Rajmahal coal (G11-13 band) is costlier by ?450 a tonne.
Prices of higher grade fuel have been reduced by 2 per cent to 29 per cent in the face of competition from imported fuel.
Consumers in steel, cement and other sectors in the open market and paying 35 per cent more than the power sector, will face a mild 3.47 per cent increase in coal prices.
According to the company, prices were revised to keep pace with rising costs and in anticipation of the forthcoming wage impact.
The current agreement that saw a 34 per cent hike in salaries will end in July.
Considering that the Narendra Modi government increased the clean energy cess (renamed clean environment cess) by ?300 a tonne since 2015 and hiked the royalty from 14 per cent to 18 per cent; electricity generation cost has gone up by upwards of 25 paise a unit in the last one year.
The impact on the distribution cost is approximately 30 paise a unit.