Coal India must remain as public sector entity, says outgoing chairman

KOLKATA: Coal India chairman Pramod Agrawal said on Thursday that the company should continue to remain as a “government entity” in the future to maintain “price stability” of the dry fuel in the country and suggested an alternative methodology for coal pricing in future.

Agrawal, whose term ends as the head of Coal India on Friday, said unlocking value cannot be the “sole” purpose of all enterprises. As a government-owned entity, Coal India holds the responsibility of ensuring that the benefits of coal production are distributed to the public, he said.

Agrawal also pointed out that the miner’s identity is synonymous with the country’s energy sector, and the present structure with CIL as the apex holding company is “strong and stable”.

“We have seen severe price escalation in international coal prices last year. In such a scenario, private companies would have stepped up their prices as well. However, for a government agency like Coal India, such a situation is unlikely,” Agrawal said while responding to a question on whether the miner should continue to be a government entity to unlock its value.

The union government was reducing its stake in Coal India to raise funds, albeit in small doses. This month, the government sold a 3 pc stake to raise Rs 4,185 crore and reduced its holding to about 63.1 per cent. Coal prices of the Kolkata-based PSU are heavily discounted against imported fuel.

The average landed price per tonne of imported coal between April-Sept period of the 2022-23 financial year was Rs 19,324.79, while the average notified price per tonne (ex-colliery) of domestic coal was Rs 2,662.97 in the same period. After over five years, the miner recently raised prices of higher grades of coal (G2 to G11) by only 8 pc, which will boost its revenue by 3 pc and will have hardly any adverse impact on power producers. “In the future, we may consider revisiting coal prices (based on certain parameters) in shorter durations. Our priority is to ensure the country is not burdened with (enhanced price) and that CIL’s bottomline remains strong.”