New Delhi, Feb 26 (PTI) State-run Coal India will raisethe price of coal on an average by about 15 per cent witheffect from tonight to bring in some parity between domesticand international prices.
"We are selling coal at 50 per cent lower than importedprice. There is a huge gap between overseas and domesticprice. Hence, our Board took the decision of raising the priceyesterday," a source in CIL (Coal India Ltd) told PTI.
The state-run CIL, the world''s largest coal producer, hadlast raised the dry fuel price in October 2009.
Coal has become costlier in the international market asproduction of the fossil fuel has suffered badly due to flashfloods in Australia''s Quuensland province that accounts for40-45 per cent of the world''s coking coal exports.
The disruptions in production pushed up the spot pricesof coking coal by USD 40-50 per tonne to USD 280-290 a tonnerecently.
The price hike would help CIL to partially mitigate itsrising operating costs, including a huge outgo on the salaryaccount for its around 3.85 lakh employees.
"The targeted production growth of 7 per cent could notbe achieved this year due to environmental problems. There isan urgent need to maintain the topline of the company," thesource said.
State-owned CIL, which accounts for over 80 per cent ofthe domestic coal production through its seven subsidiaries,marginally missed its output target of 435 million tonnes in2009-10. It has a production target of about 460 MT for thisfiscal.
The Economic Survey 2010-11, tabled in the Parliamentyesterday, had attributed the lower growth in coal productionin the current year to environmental restrictions and poor lawand order situation in Jharkhand and Orissa.
The coal Ministry and its environment counterpart havebeen at loggerheads for over a year now after mining wasdisallowed in 203 blocks, classified as ''no-go'' zones in 2009,thereby, stalling projects with a production potential of 660million tonnes of coal a year.