The Coal Ministry has decided to conduct an inquiry to ascertain whether Coal India Limited’s move to switch over to the new coal pricing mechanism was aimed at profiteering.

Following grievances received from end use industries like power, steel and cement as well as industry chambers, Coal Minister Sriprakash Jaiswal has ordered setting up a high level committee likely to be headed by coal secretary Alok Perti and have asked for a report within a month.

In a November 2011 notification, CIL had announced that it was switching over to the Gross Calorific Value system from the Useful Heat Value mechanism for grading and pricing of different GCV bands of coal. The shift to GCV pricing in which prices of the fuel are calculated based on the heat produced had pushed up prices by an average 12.5% for buyers. The new mechanism classifies coal into 17 categories, as against seven earlier.

The move triggered a huge outcry among major coal consuming sectors, which alleged a sharp increase in price for certain GCV bands.

(Sourced from www.indianexpress.com)