Domestic coal prices match international trends without raising power bills

Linkage policy gives power plants assured supply of the fuel while giving them more scope to sell electricity in exchange market

Eight years after India started a new coal auction system, prices in the domestic market are in lock step with international. The system has increased pressure on thermal power plants to keep costs low, as the government is determined that consumer electricity price doesn’t rise. The winner in the arrangement is state-run Coal India (CIL) which continues to surprise investors despite selling most of its product at notified prices.

The percentage change in prices of coal mined domestically has often crossed 50 per cent within a span of just a quarter. The changes have become steep after the