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News Brief | December 2014

Some coal blocks will be auctioned in price bands

The Union government may set a price band in the auction of coal blocks bunched together for power producers whose electricity tariff is based on the cost-plus formula. Such a band may also be set for the cement and steel producers whose end-product prices are unregulated. The government may indicate a price cap in addition to the floor price for the blocks meant for power producers that can pass on fuel costs to their consumers. Setting a price band for coal blocks is seen as the only way to trim coal price and prevent the cascading effect in electricity tariffs.
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