GoM approves Coal Regulatory Authority Bill

June 1, 2013

The Coal Regulatory Authority Bill which seeks to set up an independent regulatory authority for the coal sector to address contentious issues such as pricing, supply and quality has been approved by a Group of Ministers (GoM). The bill will now be forwarded to the Cabinet for further approval.
Why this Bill?
The bill has been proposed to address issues related to pricing, quality and supply of coal by setting up an independent regulatory authority. The regulator would be empowered to resolve disputes including those arising out of Fuel Supply Agreements (FSAs) related to price, quality, and supplies. However, the proposed regulator will not determine fuel rates, a job that will continue to be vested with the producers. An independent regulator for the sector is considered significant for fixing guidelines for price revision, improving competitiveness in the e-auctions, setting up trading margins and increasing transparency in the allocation of reserves.
The need for an independent regulatory assumes importance in the wake of coal major CIL and NTPC frequently disagreeing on quality of dry-fuel being supplied to power firms.

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