Rationalisation of the coal freight tariff by railways will have minimal impact on power tariff and the move would gradually lead to domestic fuel replacing imported coal, Power Minister Piyush Goyal said today.
He was replying to a question on whether railways’ announcement on rationalisation of coal tariff will have any impact on electricity tariff.
“No…nothing particular. We are doing so much of savings. There are many other ways. This small cost will not make any difference. Even if the coal price increases by Rs 100, there is an impact of a few paise,” he said.
The minister further said: “There would be a small impact…They (railways) said it(the move)is revenue neutral. The freight of coal which had to go to far-flung places was more, they (railways) have reduced it. In far ahead places, the power is very expensive.”
Supporting the move, the minister said railways have reduced the freight for long distances so that the domestic coal becomes more viable in front of imported coal.
“This year we are hoping that we reduce the coal imports by Rs 40,000 crore. That is our mission which is why railway freight rationalisation is a very positive step,” the minister said.
Facing shortfall in freight loading, railways had last week rationalised coal tariff by reducing the rate for long-distance transportation and increasing it for short distance.
Coal imports during July declined by 11.1 per cent to 18.03 million tonnes (MT) on the back of higher domestic availability of the fossil fuel, according to Mjunction services, an online procurement and sales platform jointly floated by SAIL and Tata Steel.
The government had earlier said the coal imports will further come down in the ongoing fiscal on account of increased domestic output.