CIL's coal price hike may burden thermal power stations

October 17, 2009: The Coal India Limited's (CIL's) move of 11 percent hike in the price of coal is likely to impose

a heavy financial burden on some of the coal-based thermal power stations in the state, Gujarat State Electricity Company (GSECL), sources said.

The impact would be felt by power stations located at Wanakbori in Central Gujarat, Ukai in South Gujarat, Gandhinagar in North Gujarat and Sikka in Saurashtra region of the state, which have about 3,500 MW power generation capacity, they said.

The sources in GSECL said that it has been purchasing about 15 million tons of coal per annum from CIL for its coal-based thermal power stations located in Gujarat.

"The majority of power generated in the state is only through coal. Gujarat will have to suffer heavily due to 11 percent hike in the prices of coal," they said. The rough calculations, assuming Rs 70 increase per ton in the prices of coal, can put additional financial burden of more than Rs 105 crore on GSECL, they added.

This Diwali gift of CIL will be costlier for GSECL which purchases coal from CIL for its coal-based thermal power stations located in Gujarat, official sources of CIL, on its move of hiking the prices of coal by 11 percent per ton, said adding that the last revision of its prices was in 2007.

Source: Business Standard