The central government is considering rationalising the prices of coal for certain grades based on their calorific value to remove any anomaly in the pricing structure, union Coal and Power Minister Piyush Goyal said here on Friday.
"A lot of stakeholders, typically, consumer organisations and my own studies show that certain grades of coal are not priced properly. So, we need to rationalise the pricing based on their Gross Calorific Value (GCV)," Goyal said at a press conference after the BCCI Environment and Energy Conclave.
The minister said prices of coal produced in India were tailored to Indian needs and were never put across global trends which made Indian domestic coal immune to the fall in global prices.
"Indian coal prices were never benchmarked to international prices. They were by and large set to Indian requirements and kept very reasonable over the years and therefore the fall in international prices has not affected the Indian coal prices," he said.
However, the minister assured that Indian coal will never be benchmarked with international prices and only the GCV will be the determining factor.
"It will not be aligned with international prices - those prices keep fluctuating - it may go up in the future. This will be aligned to the GCV."
More From This Section
Asked if this move was intended to address Coal India's falling profitability, he said: "This effort is not to address the falling profitability (of Coal India). It has to be resolved by efficiency, by growth in output productivity and technological innovation. We are committed to that and working towards that."
According to the minister, the rationalisation in the prices of the black mineral which is the main ingredient to meet 70 percent of the country's electricity needs will address coal consumers' as well as Discoms' issues.
Officials in Coal India said it produces seven grades of coal which were comparable to international prices.
However, since the GCV range of imported coal, particularly from Indonesia is more than the GCV range offered by Coal India, prices of Indian coal are marginally higher than Indonesian coal.
The central government's move is likely to bring down the cost of the black mineral for certain grades - particularly the thermal coal variant.