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CoalMin opposes proposal for dual pricing of coal

The Coal Ministry has opposed the Planning Commission's proposal of dual pricing for coal, saying it is not feasible.

Apr 01, 2013, 07.51 PM IST
NEW DELHI: The Coal Ministry has opposed the Planning Commission's proposal of dual pricing for coal, saying it is not feasible.

The proposal was discussed today in the meeting under the Chairmanship of Planning Commission Deputy Chairman Montek Singh Ahluwalia. Coal Secretary S K Srivastava, Coal India Chairman and Managing Director S Narsing Rao were among others who were part of the meeting which lasted more than one hour, according to sources.

"During the meeting, the Coal Ministry opposed the proposal of Planning Commission for dual pricing of coal saying it was not feasible," a source privy to the development said.

Sources said the Power Ministry had also raised objections to the proposal in a meeting held a few days ago.

Under dual pricing, coal would be sold at different prices in different markets.

The proposal for dual pricing comes at a time when the the Cabinet Committee on Economic Affairs (CCEA) had already approved in-principle the averaging of prices of domestic and imported coal to get a uniform price for coal.

The Government earlier said that an inter-ministerial panel will work out the modalities of price-pooling mechanism for coal.

"The CCEA has approved in-principle, certain guidelines for pooling of price and has directed for constitution of an inter-ministerial committee to work out the modalities," Minister of State for Coal Pratik Prakashbapu Patil had said.

Coal India (CIL), on its part, had earlier said that price pooling is a mechanism to implement fuel supply agreement (FSA) that it has to sign with power companies. If price pooling is approved, then 15 per cent supply of imported coal "will be not in the cost plus method, but in pooling mechanism", it had said.

The CIL board has approved the modified FSA for assured supply of 65 per cent through domestic sources and 15 per cent from imports.
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