Coal price pooling upsets industry

Industries, including power generating companies, are expressing concern over the recent move by the government to pool coal prices. The government's justification has been that the policy to balance international and domestic coal prices would contain the rising costs of coal.

A committee under the chairmanship of the Central Electricity Authority (CEA) chairperson was set up to look into the matter. The committee will work toward pooling of international and domestic coal prices so that the cost of production does not rise as international coal is expensive and also domestic coal is insufficient.

The pooling of coal prices will be similar to the price pooling principle adopted by the government for LNG. The price of LNG sourced through long-term contracts at a lower price is pooled with the rates for more expensive LNG, sourced from the spot market to ensure a uniform, average price.

Low priced coal would mean that power tariffs are not driven up.