CIL mulls increase in prices to meet rise in wage costs

KOLKATA: Coal India is considering raising prices to meet the cost of the 20% wage hike. It last raised prices by 10% in May last year.

“Unless coal prices are hiked it would be very difficult to attain a decent profit this fiscal,” a senior company executive said.

He said the wage bill puts an additional burden Rs 5,800 crore annually, and another Rs 9,500 crore needs to be spent on expansion. Further, the company has decided to sell more coal to power plants, which gets it lesser revenue than other buyers.

Coal sold through spot e-auctions earns the highest while that sold to the non-power sectors earns 20% higher revenue.

In the second quarter of the current financial, Coal India’s profit halved to Rs 368.88 crore against Rs 612.44 crore a year ago.

“Although Coal India is free to raise prices on its own, hiking them leads to rising power generation costs,” the executive said. “It also has inflationary implications on the economy since it meets more than 50% of the energy supplies. A decision to raise prices always faces resistance from various quarters and we raise prices only when we do not have any other options left.”

Coal India Ltd