New Delhi: Coal India Ltd (CIL) on Tuesday rolled back the hike in prices of coal under its new gross calorific value-based pricing mechanism that came into effect from January 1 in the wake of protests by consumers.

CIL Chairman N C Jha said the company will delink the rates from international parity prices and eventually, this will reduce the prices for different grades of coal.

He added that the reduction in prices announced on Tuesday will be with retrospective effect from January 1, 2012, and CIL will review the system after March.

However, he clarified that GCV-based grading of coal will continue, though anomalies in the pricing structure will get addressed after on Tuesday's decision.

Addressing a press conference on Tuesday, Coal Minister Sriprakash Jaiswal said, "The GCV (Gross Calorific Value) mechanism will be revenue neutral and assessment (of on Tuesday's cut in prices) will be done after March."

The new pricing policy based on the gross calorific value (GCV) had led to a 5-12 percent increase in prices of different grades of coal. Jha said delinking of local prices from global rates would assist in offsetting the projected 12.5 percent rise in prices.

"The overall price increase that was coming (from the new pricing) was about 12.5 percent... since there was a huge reaction, we have completely withdrawn that (new) pricing. We have replaced that pricing with the new one," Jha said.

CIL had shifted to a new pricing mechanism from January 1. Under this system, prices are linked to the actual calorific value or quality of coal.