GCV-based pricing good for Coal India: Sriprakash Jaiswal

A day after Coal India (CIL) rolled back hike in prices, union coal minister Sriprakash Jaiswal in an interview to CNBC-TV18 said the switch to Gross Calorific Value (GVC)-based pricing system, which led to the price hike, was made on the request of end users like power and cement companies.

Jaiswal said the proposed GCV-based hike was aimed at bringing more efficient grading system. However, the rollback had more to do with the fear of passing on the increase to customers
Now, CIL will delink the rates from international parity prices. This would eventually reduce the prices for different grades of coal. The coal producer switched to the GCV-based pricing mechanism in line with the international norms and had proposed an average of 12.5% hike in prices.
This had evoked strong protest from consumers in sectors such as power, cement, steel and aluminium. In the earlier Useful Heat Value (UHV) method, the pricing was decided on the ash and the moisture content in coal.
However, Jaiswal hinted that the new pricing mechanism will be reviewed early next financial year after assessing the performance of CIL in the January-March quarter. He also pointed out that the new pricing system will help CIL improve financials. Also watch the accompanying video.