Sunday, December 25, 2011

Coal India switches to new pricing mechanism of Jan

Sunday, December 25, 2011
Coal India Ltd is believed that the international gearing up recognized gross calorific value (GCV) to introduce-based mechanism by January 1, sources of prices. The change was advocated by the Union coal Ministry in October of this year.

The new system replaces the existing value seven useful heat (UHV) based class by a wider range of available, which each classified by a narrow bandwidth of GCV. An Indian nomenclature, developed in the 1970s defined UHV coal energy (kilo calories) per kilogram after discounting of moisture and ash content.
Revenue impact

The top management of CIL is previously announced that the new product classification revenue neutral, such as coal under any existing class offered are reclassified in such a way, so that the average price remains the same. Market sources, but suggest that a thin might "impact took up the new system" on the important coal.

Because calories per kg, different existing class by a wide range of 600-1,100 kg consumers - including the energy sector — in connection with better mines under any of this class can feel the pinch. However, should the costs of fuel sector as a whole does not significantly affected are.

According to sources, a solid proposal for conversion on GCV-based prices with effect from 1 January before the Board of Directors of the company in late next week can be placed.
Sector power factor

It may be mentioned that CIL supported conversion on GCV-based sale since 1998. Any such attempt - the latest in 2008-was in the face of strong opposition from the energy sector, which expected motive behind the move to a pricing.

"In view of the poor track record CIL in the provision of quality coal, we not only the ability of the company to implement the new system to the satisfaction of consumers;" We doubt the company intention behind such doubts, "said big business line. a senior official who makes private sector"

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