Domestic coal prices to be linked to world prices

The government is formulating a new coal pricing policy under which it will "pool" domestic and international prices of the commodity to arrive at a balanced price of this vital input for electricity generation.

Towards this, the government had also set up a committee headed by the chairperson of the Central Electricity Authority (CEA) earlier this month.

"The committee will work toward pooling of international and domestic coal prices so that the cost of production does not rise."'

India is faced with the twin problem of rising prices of imported coal and a continuing shortfall in domestic production, which is far short of domestic requirements.

Under the price pool, domestic and international prices of coal are averaged out to enable uniformity of rates for all consumers, irrespective of where they are sourcing the material from.

In effect, consumers sourcing coal from domestic producers and those who import their requirements will end up paying the same price for coal under the new pricing formula.