Price pooling of coal - Report on 25th May

A committee under the chairmanship of the Central Electricity Authority (CEA) chairperson was set up earlier this month to look into the matter. The committee comprises officials from the power, coal and environment ministries, the Planning Commission and state government officials.

Pooling refers to the process in which domestic and international prices of material are averaged out to enable uniformity of rates for all consumers, irrespective of where they are sourcing the material from.

As reported the pooling of coal prices is likely to be based on the same price pooling principle adopted by the government for LNG. In the case of liquefied natural gas, the price of LNG sourced through long-term contracts at a cheaper price is pooled with the rates for more expensive LNG sourced from the spot market to ensure that consumers across the country avail of an uniform, average price.

The Power Ministry is exploring every opportunity possible to make coal available to companies at a low price so that electricity generation does not suffer and power tariffs are not driven up.