Coal India mulls 10% price hike to tide over cost push, wage revision
Mining major Coal India Ltd might raise prices of the dry fuel by at least 10-11 per cent to mitigate the impact of increased costs and an impending wage revision, sources close to the development said.
The Calcutta-based company had last hiked coal prices in 2018. Its current average regulated price realisation is Rs 1,394 per tonne.
“There has been no price rise in coal in the fuel supply agreements (FSA) since the last few years. Costs have jumped on all fronts and a wage revision is due. A minimum 10-11 per cent increase is necessary to avoid bottomline erosion.
“Coal India has informally discussed the matter with board members and most of them have acknowledged the need to hike prices of coal. The miner is awaiting the government’s nod following which it will take the final call,” they said.
Chairman and managing director Pramod Agarwal had recently said the costs of the miner had gone up and there was no reason why it should not increase the prices of the dry fuel.
The price of coal for the power sector is cheaper than non-power industrial consumers like steel and cement. “On an average, non-power coal is 15-20 per cent higher than power consumers,” the sources said.
The wage revision, which is due from July this year, is likely to cost the miner an additional Rs 10,000 crore, they said.