The pricing regime proposal has been submitted to the Cabinet Committee of Economic Affairs (CCEA), the apex government body for economic policy decision-making. It was expected to be put into play next month, before the government auctions coal blocks, which had been allotted earlier but canceled by the Indian Supreme Court for the arbitrary and illegal process adopted in awarding these blocks.
Since the auction of coal blocks would take some time, the new import coal pricing mechanism would help CIL to increase imports and partially bridge the current demand-supply gap of the dry fuel, the official said.
“We are analyzing the proposal and weighing in the pros and cons and will come up with a final import pricing soon,” said Secretary to Coal Ministry S.K. Srivastava.
Despite CIL being the largest miner in the country primarily tasked for supplies of coal to thermal power plants, there have been few takers for its import consignments since domestic coal was cheaper than imported consignments, the official said.
While some thermal power producers were importing on their own, CIL would have to increase import contracts since more companies would now have to rely on the miner for feedstock supplies after the courts canceled allotment of 214 coal blocks awarded to various industries since 1993, they said.
With pool price and offers at average of domestic and imported price, more companies would depend on CIL for their imported coal requirements, he added.
Despite shortage of coal in the domestic market, CIL imported just 5 million tons during April-September when total coal imports into the country were estimated at 110.5 million ton, up 18% over the corresponding period of the previous fiscal year.
CIL had appointed government-owned trading house, MMTC Ltd. to contract shipments on its behalf and was awaiting orders from companies, the official said.
The imported coal blended with its domestic production would be supplied to thermal power plants, which were commissioned after 2009 but did not have assured fuel supply linkages.