Coal India Ltd (CIL) will increase prices from Thursday midnight. The CIL board, which met in New Delhi on Thursday, gave its nod to the hike which would take place in a differential manner for the profit-making and the loss-making companies in CIL’s fold. CIL, which accounts for 85 per cent of the country’s production, had last increased its prices on December 13, 2007 by around 10 per cent average.
While a 15 per cent hike has been allowed for coal produced by Eastern Coalfields Ltd (ECL) and Bharat Coking Coal Ltd (BCCL), the other coal-producing subsidiaries of CIL would get a 10 per cent increase. These companies are Central Coalfields, Northern Coalfields, South Eastern Coalfields, Western Coalfields and Mahanadi Coalfields Ltd. (MCL).
Further, ECL is authorised to set a special price for its high quality A & B grades of Ranigunj coal available in limited quantity, on a par with the price of imported coal.
CIL Chairman P. S. Bhattacharyya said that the company’s annual revenue generation on account of the increase in prices would be Rs. 4,500 crore in a full year and around Rs. 2,500 crore for the remaining part of 2009-10. The hike would allow a 50 per cent neutralisation of CIL’s wage costs. “The remaining 50 per cent would be absorbed through improvements in productivity,” he said.
He said that the current price increase averages 11 per cent.
Even as the detailed prices were being worked out, sources said that following this increase the lowest price of CIL would increase from Rs. 320 to Rs. 350 a tonne (G grade coal from MCL) while the highest priced coal would be the premium A Grade Ranigunj coal which would be priced at Rs. 2,200 against Rs. 1,910 a tonne. These prices are of basic pit-head thermal raw coal. Steel-grade coking coal prices would increase from Rs. 3,260 to Rs. 3,750.
Giving the rationale behind two companies being allowed a higher price, CIL officials said the main reason was that these two companies — ECL and BCCL — had to bear the sharpest brunt of the wage hike since they are the biggest employers among the CIL subsidiaries.