NDRC: Coal Companies Shall not Inflate Coal Prices Through Disguises Like Unreasonably High Transport Costs

SHANGHAI, May 19 - Recently, the National Development and Reform Commission's Announcement on Clarifying the Acts of Price Inflation by Operators in the Coal Sector (No. 4 of 2022) proposed specific behavioural manifestations of price inflations. When entering into a contract with the demand side, coal production and traders shall not substantially increase the sales price of coal in disguise by unreasonably raising transport costs or unreasonably charging other fees.

For example, the upper limit of the reasonable range of the medium and long-term trading price of coal (5500 kcal, the same below) in west Inner Mongolia is 460 yuan/mt. And a local coal mine signed a medium and long-term contract with a power plant, agreeing to a price of 460 yuan/mt, but requiring the power plant to bear the circulation cost of 150 yuan/mt from the coal mine to the station for loading. If the reasonable circulation cost of the coal mine to the station for loading is actually 50 yuan/mt, the coal mine actually raised the sale price of coal substantially in disguise, and there was suspected price gouging.