Kolkata : The hike in diesel prices will put an additional burden of Rs 600 crore per annum on Coal India Ltd in the production of coal.

“For each Re 1 hike in diesel prices, the impact is Rs 120 crore and so for a hike of Rs 5, the annual impact would be Rs 600 crore,” Coal India Chairman and Managing director S Narsing Rao said on the sidelines of the company’s annual general meet.

When asked if the PSU would revise coal prices, Rao said, “We will see”. For each tonne of coal production, the diesel cost is Rs 55, Rao said.

According to Coal India officials, the average cost of production per tonne is about Rs 560-570 and based on this the impact of fuel price hike is close to 10 %.

Rao said the government could allot some or most of the de-allocated coal blocks to it for mining. The government has de-allocated five coal blocks as recommended by the Inter Ministerial group (IMG).   However, there was no decison as yet regarding this in the Coal Ministry.     Speaking about Fuel Supply Agreement (FSA) and price- pooling, Rao assured shareholders that under no circumstances the final financial and legal interest would be jeopardised for signing the agreement.

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