CIL to take a Rs.600 crore hit on diesel price hike

Coal India Ltd. (CIL) is set to take an annual hit of Rs.600 crore in its input costs due to the diesel price hike.

A one rupee increase in diesel price impacts CIL to the tune of Rs. 120 crore, according to its

Chairman and Managing Director S. Narsing Rao.

The company , however, was not taking any decision to pass on the increase to its consumers, he said while talking to reporters after the company’s 38th annual meeting. “We will see,” he said when asked about a price revision. He later told

The Hindu that this was not under consideration now.

To a query on CIL getting any of the de-allocated blocks, Mr. Rao said that while this was likely, there had been no instruction in this regard from the parent ministry as yet. During the meeting, he assured shareholders on the fuel supply agreement and price pool saying that under no circumstance would the financial and legal interest of the company be jeopardised.

Earlier in his speech he said that in order to rework some of the identified abandoned mines, the company was in the process of formulating a business plan using the mine developer and operator concept.

He said that during this Plan period, a total of 133 projects with an estimated capacity of 420.85 million tonnes were being planned to be taken up. Referring to regulatory clearances, Mr. Rao said that 57 proposals with an incremental capacity of 137 million tonnes annually were awaiting environmental clearances.

FSA reaches signable form

After a five-hour-long meet following the AGM, the CIL board agreed on the fuel supply agreement. Mr. Rao said that this had now reached a `signable form’, which would need another meeting of the board before it could be hosted on the company’s site.

The price pool issue, which Mr. Rao said was a mechanism for pricing the 15 per cent coal that would have to be imported to bridge the gap between demand and supply, was being sent to CIL’s customers (for their consent) as per a board decision.