Coal Ministry for clubbing spot auctions; power companies jittery

India is likely to club all spot coal auctions for regulated and non-regulated sectors, aiming at a market-determined uniform price for every grade. At present, separate auctions are held for different sectors and special auctions are held for the power sector, which is the only regulated sector.

A senior official said the proposal by the coal ministry targets removal of opaque decision making in Coal India subsidiaries as to which mine will allocate coal for which auction category. The coal ministry has circulated a note for inter-ministerial consultations, after which the Union Cabinet will be approached.

“Coal pricing should be discovered without any sectoral preferences,” he said. However, power generation companies expressed concerns.

Association of Power Producers director general Ashok Khurana said the proposed unified auctions for all users-regulated and non-regulated sector-would be detrimental to power consumers who will have to pay more and the tariff would get subjected to volatility.

“Before they think of implementing it, they need to do the following as they claim that abundant coal is available-increase annual contracted quantity