Coal India Ltd (CIL) Chairman and Managing Director S Narsing Rao has said the recently announced diesel price hike will put an additional burden of Rs 600 crore per annum in production of coal for the public sector company.
"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," Rao said on the sidelines of CIL's Annual General Meeting (AGM).
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When asked if the PSU would revise coal prices, Rao said: "We will see".
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 per cent.
"For each tonne of coal production, the diesel cost is Rs 55," Rao said.
Speaking at the AGM, Rao said he expects some of the de-allocated coal blocks to come to CIL's stable. However, the coal ministry has not yet decided in this regard.
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Rao also assured shareholders that under no circumstances the final financial and legal interest would be jeopardised for signing the fuel price agreements with the power sector companies.
With inputs from PTI