Beijing will soon let producers pass on some cost increases
The central government is likely to allow mainland power companies to raise tariffs in May or June in compensation for coal cost increases last year and this year, according to China Power International Development chief executive Li Xiaolin.
Analysts expect the long-awaited 'coal cost pass-through' tariff adjustment mechanism to be implemented next month.
'It probably will not happen in April, but I expect it to come in the first half,' said Ms Li, ex-premier Li Peng's daughter, who said she had seen the draft circular on the mechanism.
It is understood that the government wants power producers to shoulder 30 per cent of coal cost increases exceeding 5 per cent, with the rest passed on to distributors and consumers.
But Ms Li said that it would not be an across-the-board tariff increase for all plants, and that it would take into account various parties' affordability, and the actual coal price movement in regional or provincial markets.