CIL raises coal auction amount to check prices
In a bid to bring down prices through a forced over-supply strategy, Coal India will now be offering 45 million tonne (mt) of coal through e-auction between May and July 2008 against an earlier plan to sell 38 mt during the entire 2007-08 fiscal t...
By TNN |
KOLKATA: In a bid to bring down prices through a forced over-supply strategy, Coal India will now be offering 45 million tonne (mt) of coal through e-auction between May and July 2008 against an earlier plan to sell 38 mt during the entire 2007-08 fiscal through this platform.
The public sector coal major has been directed by the minister of state for coal Santosh Bagrodia to offload 15 million tonnes during May and June 2008 through the e-auction route. In July, CIL now plans to sell 10 mt. The earlier target was to sell a little over 3 mt of coal every month.
���The strategy is to flood the market with abundant supply of coal so that prices dip and it becomes affordable to all, including the small-time consumers. It will also send a signal to the market that the country has abundant supply of coal,��� Mr Bagrodia told reporters in Kolkata. It is, however, not clear if the market is in a position to consume the entire amount of coal that will be offloaded through e-auction in the market. Offtake will also have to be supported by logistics, which, if not in place may result in excess supply.
In 2007-08, CIL managed to sell lesser volume of coal than it had offered through the e-auction route.
Nevertheless, CIL���s started the year with an excess stock of 48 mt from last year. This is about 5 mt more than 2006-07. The rise in volume allocated through e-auction will be supplied from the excess stock that exists.
Incidentally, the coal ministry has also decided to sell about 8 mt of coal through state agencies, which will offer it to small and medium sized consumers as well as households at the notified price.In a parallel development, CIL may also increase coal production by about 10-12% this year against an earlier target of increasing it by 6%.
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