“The subsidiary was forced to cut prices of three grades of coal which constitute more than 90 per cent of its sales, as offtake started declining from March following demand dip faced by almost all its consumers during the lockdown.”
Earlier, the company was hoping that consumers would be lured by concessions it offered in credit facilities, but many power companies were not in a position to take advantage because of financial stress.
“Following lukewarm response from consumers, Bharat Coking Coal’s board of directors, for the first time, decided to cut prices last week,” the executive said.For normal grades of the fuel, the hoing company, Coal India, can change prices, but for higher grades, like the ones produced by Bharat Coking Coal, subsidiaries are allowed to adjust the rates.
Coal India has been increasing prices almost every five years to cover its higher wage bills. Coal prices were last increased hiked almost four years ago.
“Falling sales and increasing dues from power generators is hurting cash flow to the extent that its entire working capital has been spent and April salaries need to be financed via bank loans,” the executive said.
