The Gujrat Urja Vikas Nigam (GUVNL) has decided not to purchase A&B grade coal from South Eastern Coal Field (SECL), due to steep hike in its prices.
The hike follows Coal India (CIL) increasing prices of its premium A&B grades linking it to international prices.
SECL is a subsidiary company of CIL. The CIL has said it has revised the prices of A&B grades coal by 154% and 162%, respectively, while prices of all other grades were being revised by 30%, effective from February 27.
Official sources said GUVNL has already communicated to SECL in this regard as the steep hike in prices of premium A&B grades of coal will impose a yearly heavy financial burden of Rs 260 crore on it.
However, GUVNL has been continuing purchase of C-F grades of coal from SECL and Western Coal Field (WCL) for its coal based thermal power stations located at Wanakbori near Vadodara in Central Gujarat, Ukai near Surat in South Gujarat, Gandhinagar in North Gujarat and Sikka near Jamnagar.
While it uses lignite as fuel for the lignite based power station at Panndhro in Kutch district, they said.
At the time of revision of prices of various grades of coal, CIL had said "the prices of premium grades of coal, A&B, has been linked to the international price and would now be offered at 15% discount on the global spot prices."
"Rest of the grade, C-F, will now be 30% dearer than the earlier notified price," it further said.
CIL produces about 20 million tonne of grade A&B coal. Prior to the hike they were being offered at between Rs 1,710 and Rs 2,370 per tonne. These two grades will now cost between 3,690-4,100 per tonne, sources added.