Coal India is likely to further delay its plan to raise prices as it has failed to secure the nod of key stakeholders amid an outstanding of Rs 24,000-25,000 crore. The recent coal crisis at power plants in several parts of the country has caused the dry fuel producer to relax payment terms and push coal to ensure that there is the least shortage of power to keep the economy on track.
A source told PTI that the agenda of price hike is unlikely to be placed before the upcoming board meeting on November 12 as the board has not yet received the go-ahead from important stakeholders in the wake of chaos of coal shortage since last month, though the global price of coal has risen significantly. Unrestricted supply of the dry fuel amid crisis in power plants has resulted in a further jump in dues that already reached around Rs 24,000-25,000 crore.
Coal dispatch to the power sector has increased by 27.13% to 59.73 million tonnes in October, owing to a spurt in power demand amid an unprecedented rise in import prices. The coal major was attempting to reach two million tonne per day production, but till November 6, the average production was 1.6 million tonne.
Moreover, states such as Maharashtra, Rajasthan, Madhya Pradesh, Karnataka, West Bengal and Tamil Nadu owe huge sums of money to Coal India. As such, the price hike is inevitable with pending wage revision that will directly increase its wage cost by around 10%. “Without increasing price, it will not be possible for Coal India to absorb the wage hike. Already, some subsidiaries are facing cash problems due to high dues and had to resort to loans,” the source said.
Coal India last hiked its prices in 2018; its current average regulated price realization is Rs 1,394 per tonne.