Coal India Limited (CIL) on Tuesday announced roll back of coal prices till March 31. The company decided to de-link the rates from international parity prices which will reduce the prices for different grades of coal. The reduction in prices announced on Tuesday will take retrospective effect from January 1, 2012, and CIL will review the system after March 31. However, CIL said gross calorific value (GCV)-based grading of coal would continue, though anomalies in the pricing structure would get addressed after Tuesday's decision. Talking to journalists here, Coal Minister Sriprakash Jaiswal said, “The GCV mechanism will be revenue-neutral and assessment of the present cut in prices will be done after March. The new pricing policy based on the gross calorific value (GCV) had led to a 5-12 per cent increase in prices of different grades of coal. De-linking of local prices from global rates would assist in offsetting the projected 12.5 per cent rise in prices,” he said.

“The overall price increase that was coming from the new pricing was about 12.5 per cent. Since there was a huge reaction, we have completely withdrawn the new pricing. We have replaced that pricing with the new one,” outgoing CIL Chairman N. C. Jha said.

CIL had shifted to a new pricing mechanism from January 1. Under this system, prices are linked to the actual calorific value or quality of coal. The new pricing mechanism resulted in an increase in rates of the fossil fuel.

Consumers across sectors, including power, cement, aluminium and steel, have opposed the new method as they felt that prices had risen substantially and this would necessitate an increase in prices of their own respective commodities.