Sunday, June 26, 2022

Coal crisis still prevails, continues to affect non-power sector: Industry body

Must read

  • The FIMI said that a coal crisis still prevails in the country and continues to affect the profitability of industries belonging to the non-power, non-regulated sector
  • NRS consumers struggling to get un-interrupted coal supplies and rakes for continued operations, ultimately leading to coal crunch, said FIMI

New Delhi: The Federation of Indian Mineral Industries (FIMI) has written a letter to the Prime Minister’s Office (PMO) requesting resumption of normal coal supplies by state-run Coal India Ltd (CIL), saying that there is no respite in sight for the coal crisis that continues to face the non-power sector. In a letter dated December 9, the FIMI said that a coal crisis still prevails in the country and continues to affect the business continuity and profitability of industries belonging to the non-power, non-regulated sector, including aluminium, steel, cement and other metal industries that are dependent on domestic coal.

‘Non-power sector struggling to get un-interrupted supplies’

“With the crisis hitting its peak during September-October 2021, the government witnessed full support of the NRS consumers for diverting maximum quantity of coal to Power Sector. Since then, the situation for the power sector has improved to current levels of 10 days’ stock availability, while the NRS consumers struggling to get un-interrupted coal supplies and rakes for continued operations, ultimately leading to coal crunch,” FIMI said in an official statement.

Coal India had recently requested Indian Railways in a recent letter to increase rake supplies for the power sector to 296 rakes a day. To put the figure into perspective, it must be noted that in November, a total of 272 rakes per day were being supplied for both power and non-power sector. The move has obviously been met with criticism from the non-power sector. Pointing to the same, the FIMI said in the letter, “Such a step, if taken, will put the consumers of Non-Regulated Sector (NRS) in a precarious situation depriving them from getting sufficient coal rakes even for its sustained operations (for which the demand is 50 rakes per day).”

‘Coal availability to non-power sector directly linked to economy’

The industry body also said that the demand for sufficient allocation of coal rakes to the non-power sector is directly linked to sustaining the Indian economy as the sector has played a crucial role in bringing industrial activity back on track and in achieving V-shaped economic recovery.

Backdrop

The second half of the current financial year witnessed a severe coal crisis in the wake of a sudden surge in electricity demand and a rise in international coal prices. Since thermal power plants (TPPs) had regulated coal supplies in the months leading up to the crisis in September, a sudden surge in demand depleted their coal stocks quickly, with the average coal stock at TPPs dropping to three days in October. In order to mitigate the crisis, Coal India had to ramp up coal production and divert coal supplies to the power sector. Since then, the situation has improved. However, the power sector is being prioritised as far as coal supplies are concerned in order to build up coal stocks at TPPs.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)

- Advertisement -

More articles

- Advertisement -

Latest News