How effective coal regulator be to avoid monopoly situation


Finance minister P. Chidambaram said that pricing of coal would be kept out of the ambit of the coal regulator, and that it would be empowered to resolve disputes, including those arising out of fuel supply agreements with power and other downstream producers. "There is an agreement that pricing must be left to the producer of coal, but the regulator will have powers to adjudicate on disputes relating to price, quality, supplies. All disputes will be adjudicated with the regulator and then there will be an appellate authority," PTI had cited Chidambaram as saying. Scindia said the proposed appellate body would have some control over pricing. "We certainly have given a certain amount of authority to the coal regulator in certain very specified cases," he said in response to a question if regulation of pricing was within its ambit. Besides pricing, the new body will be entrusted with the regulation of testing, quality, supply and grading of coal, Scindia said. "It (the proposed regulator) takes into account the interest of all stakeholders within the industry, the suppliers of coal as well as the buyers of coal," he said. "It balances and protects the interest of all stakeholders and, at the same time, gives a very judicious balance to the regulatory authority to be able to supervise the supply and demand of coal in the country." Both the proposals-one on the regulator and the appellate body and the other on the price pass-through mechanism-are likely to be taken up by the cabinet on 7 June, a top coal ministry official said.

1. What steps have been taken by government to overhaul coal sector?

2. How effective coal regulator would be to avoid monopoly situation in coal industry in case pricing is kept out of its remit?

3. How is price decided in coal industry where there is situation of near monopoly?

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