Don't revise rates frequently for huge profits: Panel to CIL

Tags: CIL, News
Put minimum burden on consumers while revising prices as nationalisation of coal sector was done to ensure dry-fuel supply to power and other sectors to boost economy and not for "making huge profits", a high-level panel has told Coal India.

"The philosophy behind nationalisation of coal sector was to ensure the availability of coal to power sector and other end-users to boost the national economy rather than making huge profits by coal companies by frequent revisions in coal rates," Standing Committee on Coal and Steel has said in its latest report.

It said Coal India (CIL) and its subsidiaries need to "strike a balance between coal production and coal price".

The panel's observations come close on heels of CIL subsidiary Western Coalfields hiking coal prices by 10 per cent in December to fetch additional revenue of Rs 140 crore. All other subsidiaries had hiked prices of non-coking coal in May last year, which is expected to fetch an additional Rs 2,119 crore revenue this year.

The Kalyan Banerjee-chaired panel said it understands that "while meeting the coal demand from different sectors, CIL and its subsidiaries have to make profit for its sustainability" but recommended to put minimum burden on consumers.

"The Committee strongly recommends that while calculating the coal prices or going in for revision of coal prices, CIL and its subsidiaries should endeavour for revenue neutrality as far as possible so as to put minimum burden on coal consumers thus securing their interests and welfare," it said.

The largest revenue contributor to CIL on account of latest price revision would be Mahanadi Coalfields which is expected to contribute Rs 686 crore, followed by Rs 664 crore from Northern Coalfields and Rs 495 crore from South Eastern Coalfields.

Central Coalfields' contribution to the kitty would be about Rs 248 crore, while Bharat Coking Coal would get Rs 103 crore additional revenue.

As a holding company with 90 per cent government stake, CIL has seven subsidiaries which produce coal. Its eighth subsidiary - CMPDI is into design and planning of the mines.

Together, they produce about 450 million tonnes coal accounting for 80 per cent of the country's production.

The coal sector was nationalised in 1973.

EDITORIAL OF THE DAY

  • Insurance regulator must ban differential pricing and exemptions on health covers

    To reduce their overall losses, non-life insurance companies have been increasing the health insurance premium they charge retail customers, both at t

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Arun Kumar Jain

Reframe mindset to achieve excellence

Niels Bohr, the famous quantum physicist on­ce said, “The opposite ...

Kuruvilla Pandikattu

More real than the reality

Virtual reality (VR), a te­chnology that offers an un­imaginably altered ...

Dharmendra Khandal

Urbanisation is costing us our wildlife

The road transport and highways minister Nitin Gadkari aims to ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture