Rates of Domestic Coal in India

The comparative position of the Freight on Board (FOB) prices of imported coal, as on June 2010, vis-à-vis the price of domestic coal on Freight on Rail (FOR) ex-colliery basis in energy terms is as under

Coal Company Field Grade Price of Domestic Coal in Energy terms on FOR Ex-colliery Basis (INR/MK Cal) Estimated GCV K.Cal/KG. FOB Price of Imported Coal in Energy terms (INR/MK Cal.)
Indonesian Coal South African Coal Australian Coal
Eastern Coalfields Limited Raniganj B Premium ROM 462.67 6200 727.01 713.94 682.95
Bharat Coking Coal Limited Jharia W-IV ROM 319.90 4700 609.28 - -
South Eastern Coalfields Limited Korba C Premium ROM 287.86 5500 662.63 - -
Western Coalfields Limited Umrer D ROM 318.94 4700 609.28 - -
Mahanadi Coalfields Limited lb Valley F ROM 175.58 3900 480.08 - -

While fixing the price of domestic coal, the interest of the end-use consumers is taken into consideration to minimise the impact on the national economy.

The factors that are taken into consideration while revising the domestic coal price are as follows:

  1. Increase in input cost for production of coal.

  2. The movement of All India Consumer Price Index (AICPI) and Wholesale Price Index (WPI).

  3. Capacity of Coal India Ltd. (CIL) to absorb the impact of increase in cost to the extent possible.

  4. Demand and supply scenario.

  5. Landed cost of imported coal.

  6. Requirement of fund for investment in upcoming projects and modernisation of existing mines for augmentation of production.

  7. Financial viability of new coal projects.

CIL does not at present have any plan for bringing, parity in the prices of domestic and imported coal. The impact of the last price revision effective from October 16, 2009 on power generation from coal based power units is estimated to be about INR 0.05 (five paisa only) per KWH.

The notified prices of coal produced by CIL are cheaper than the market price and price of imported coal. Coal is supplied uninterruptedly at notified price to the coal based power plants in terms of Fuel Supply Agreement (FSA) except for the small portion of Grade A and B coal from underground mines of Eastern Coalfields Ltd. (ECL), which is being sold under Memorandum of Understanding (MoU) to the power utilities at a price higher than the notified price.