Coal India has reverted to a pre-Covid coal auction structure from November, allowing its subsidiaries to determine the pricing as sales pick up.

With the onset of the pandemic, the public sector miner had brought down the reserve price of the fuel sold through auctions close to zero during the first half of the ongoing fiscal. This was done to keep sales buoyant during the pandemic amid cash flow concerns among coal consumers.

Subsequently in October, the miner set an upper limit of 10 per cent over the notified price for coal sold through e-auctions.

Coal India officials said the objective was to test the market demand. Under the new rules, auctioned coal fetched 13 per cent premium over the notified price, while a special spot auction for importers fetched a 14 per cent increase over the notified value.

Overall 16.8 million tonnes (mt) of coal was sold through the auction route in October compared with 5.8mt in the corresponding month of the previous year.

“From November onwards, we have reverted back to the pre-Covid status where subsidiaries of Coal India would determine their own add-ons. Gauging the response, we are confident of stable auction sales and increased premium in the ensuing months,” a senior executive of the company said on Wednesday.

According to CIL, the unorganised coal market consisting of consumers and traders with no direct access to purchase coal have shown a healthy appetite in spot auctions, comprising 32 per cent of the overall auction sales during October and posting a growth of 125 per cent over the September volume of 2.4mt.

A forward auction meant specifically for the power sector booked 6.5mt in October, accounting for 38.7 per cent of the total booked quantity and posting a a 225 per cent growth over September.