There are no price controls on coal in Japan. All fuels and energy services are subject to ageneral consumption tax (akin to a value-added tax) at a flat rate of 5% (4% national, and 1%prefectural), as well as excise and other taxes at different rates according to the fuel.A coal tax is levied on all final sales of coal.With respect to
international market, a “benchmark pricing”, typically a negotiated price
between Japanese steel mills and Australian producer for coking coal or between Japaneseelectric utilities and Australian producers for steam coal, prevails as a reference price ininternational market. However with the development of spot market, where coal price tendsto be much lower recently, a benchmark pricing system is beginning to be influenced by spotmarket pricing, because buyers need toprocure coal at lower price in the face of deregulationof electricity market or international competition.
PRICE SETTING MECHANISMS: DOMESTIC COAL PRICING
Prices of coal products consist of various elements, such as:
Mine mouth costs: labour cost, production cost, royalty and capital cost;
Transportation costs: rail cost;