KOLKATA: The Tariff Commission is likely to make its recommendations on coal prices soon. Sources said that the Commission had held discussions with a gamut of coal companies ranging from the Board for Industrial and Financial Reconstruction (BIFR)-listed companies such as Eastern Coalfields Ltd and Bharat Coking Coal Ltd to the profitable ones like Mahanadi Coalfields Ltd., to collect data for the study that it was now conducting.

Consultations with officials of the holding company, Coal India Ltd. (CIL), were also being held, sources told The Hindu.

The present Tariff Commission, which was established in 1997, functions as an expert body to recommend appropriate tariff levels. It assumed this role after the Bureau of Industrial Costs and Prices (BICP) was merged with the Commission in April 1999 to provide in-house support. The Commission conducts studies on costing and price fixation referred to it by Central Ministries and agencies, including those of the state governments.

After the deregulation of coal prices in 1998, prices were increased through a consultative process between the ministries. This time, the Centre wanted the Commission to study some issues including the impact of e-marketing on coal prices.

The power sector which accounts for 75 per cent of the thermal coal offtake, has also favoured a study by the Commission.

Sources said that the last price increase for coal (by about 15 per cent) was effected in June 2004, after a three-year gap, coinciding with an increase in international prices. CIL, which produces 85 per cent of the country's coal, had been lobbying with its parent ministry for another round of hike since two years had already passed and global prices were moving upwards.

Moreover, CIL has argued that price discovery through e-marketing of coal, launched for the non-core sector since April 2005, has revealed that consumers were willing to pay prices which were 66 per cent higher than the notified prices.

CIL now wants the coal prices to be benchmarked against e-market prices. For the power-sector, which buys coal through fuel supply agreements, a pre-determined discount could be agreed upon if the consumers met their offtake commitments. Coal prices now vary between Rs. 370 a tonne for G grade coal and Rs. 1,740 for A grade Ranigunj coal.

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