A marginal hike in coal prices is in the offing. "I will be soon approaching the Prime Minister on the matter," Coal Minister Sriprakash Jaiswal told PTI.
Jaiswal's statement came after Coal India said its multi-billion dollars worth of projects could become unviable if prices were not hiked. The PSU is seeking a nominal increase in prices of its products which were marginally revised last in 2007.
"Our prices starting at about $16 a tonne are over 50 per cent cheaper than the prevailing global rates. We are seeking a marginal increase as we do not wish to lose the tag of provider of cheap coal to end users," Coal India chairman Partha S Bhattacharyya said.
CIL is undertaking projects entailing huge investment and "a nominal hike in coal prices would make such projects viable," he said.
Also, the Rs 4,000 crore (Rs 40 billion) coal-wage pact between CIL and its workers is a factor behind the demand for a price hike.
Bhattacharya said Coal India had reported a sharp drop in retained earnings because of the wage-built annual impact. A profit of Rs 300 crore (Rs 3 billion) on a turnover of Rs 45,000 crore (Rs 450 billion) was low.
Retained earnings are that percentage of net earnings of a company that is not paid out as dividends but is retained by the company to be reinvested for the growth of the business. CIL had a pre-tax profit of Rs 8,700 crore (Rs 87 billion) in the last fiscal.
