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Fixing coal prices will continue to be vested with producers: FM

08 May 2013 Evaluate

Resolving the issue of fixing coal prices, a Group of Ministers (GoM) panel has decided that coal producers will continue to determine the prices of fuel rather than proposed regulator for the coal sector, which is expected to be set-up soon. The regulator, however, will be empowered to resolve issues including disputes arising out of fuel supply agreements (FSAs) and quality of fuel among others.

Regarding the set-up of coal authority, Finance Minister P Chidambaram said that an agreement has been arrived upon on the contents of the Coal Regulatory Authority Bill to set up the regulator and the law ministry has been asked to re-draft some sections of the bill. All the sections were examined carefully and re-drafted bill will come back to the GoM for formal approval and then it will move to the Cabinet for discussion, he added.

An independent regulator for the sector is considered important for improving competitiveness in the e-auctions, fixing guidelines for price revision, setting trading margins and increasing transparency in the allocation of reserves. Currently, a lot of coal projects have been blocked for long due to various reasons including delays in environment and forest clearances among others.

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