India's Plan panel: Leave coal prices to market, allow free trade

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31 Aug 2009

The coal pricing may see a complete revamp and the sector may enter into a free trade zone, if suggestions of the Planning Commission are implemented. "...Coal prices should ideally be left to the market and trading of coal, nationally and internationally, should be free," the Commission said advocating export of coking and non-coking coal and suggested benchmarking export prices with import rates.
Although coal prices were de-regulated in 2000, its price is fixed by state-owned companies under the guidance of the Coal Ministry. Navratna PSU Coal India, which accounts for more than 80 per cent of the country's total coal reserves, last raised coal prices in 2007 by 10 per cent.
Reviewing the Integrated Energy Policy, the Plan panel said, "High quality coking and non-coking coal, which are exportable, should be sold at export parity prices as determined by import price at the nearest port minus 15 per cent."
It further added that "since a substantial amount of coking coal is imported, domestic coking coal should be priced at import parity price".
The matter is likely to be taken up during the full Planning Commission meeting, headed by Prime Minister Manmohan Singh, on September 1, sources said.
When sought comments on Plan panel's suggestions, Coal India Chairman Partha S Bhattarcharyya said " that is an excellent suggestion. We are very happy."

Source: PTI