Most states fall in line with MoP diktat; agree to import coal

As on Saturday evening, CIL had received indents for importing 2.4 million tonnes (MT) of coal from West Bengal, Punjab, Rajasthan, Madhya Pradesh, Andhra Pradesh, Gujarat and Maharashtra, while states such as Tamil Nadu, Karnataka and Haryana have started the process of importing coal on their own.

coal import

Falling in line with the Centre’s diktat to start the process of importing coal or face a cut of 30% in domestic coal supply from June 7 onwards, most state-run utilities and independent power producers (IPPs) have agreed to import coal, either on their own or through Coal India (CIL), to meet the shortfall in domestic coal supply.

As on Saturday evening, CIL had received indents for importing 2.4 million tonnes (MT) of coal from West Bengal, Punjab, Rajasthan, Madhya Pradesh, Andhra Pradesh, Gujarat and Maharashtra, while states such as Tamil Nadu, Karnataka and Haryana have started the process of importing coal on their own.

However, the notable exception are thermal power generators from Uttar Pradesh, where the state government has refused to give the state gencos as well as the private generators its approval for importing the fuel on the grounds that the imported fuel is going to be four-to five times costlier that the domestic coal.

According to a source, while CIL has received indents for importing 2.4 MT, another 7 MT would be imported by states on their own as they have already started the process of tendering for the imported coal. Apart from this, NTPC and DVC will also import around 23 MT of the dry fuel, he said.

Moreover, the government has directed state-owned CIL to import 12 MT of coal as reserves for power utilities for the next 13 months. “The Government of India has mandated Coal India to import 12 MT of coal for July this year to July 2023,” the source said, adding that CIL will very soon issue a short-term and a medium-term tender for this. “While the delivery for the short-term tender will be between July-December 2022, the medium-term delivery would be between July 2022 to June 2023,” he added.

It may be mentioned that the ministry of power (MoP) had decided on May 28 to rope in Coal India to import coal for blending on government-to-government (G2G) basis and supply to thermal power plants of state generators and IPPs on composite billing along with the domestic coal. The ministry had asked all thermal power generators to indicate their coal import requirements for blending by May 31, but since only three states — Gujarat, Madhya Pradesh and Andhra Pradesh — could give their approval by then, the government decided to extend the date till June 3 to facilitate other states to compile their requirements. However, the gencos further sought time till Saturday afternoon (June 4) to figure out the quantity of coal they would require.

Since most states were still unwilling to toe the line, the Union power ministry stepped up pressure on June 1 and said that domestic fuel supplies to state government-run utilities and IPPs will be cut by 30% effective June 7, if they do not place their indents with Coal India or have not already initiated their own tender process for purchase of imported coal for blending purpose. It added that the allocation of coal from domestic sources would be further reduced to 60% from June 15, if the gencos continued to be non-compliant with the directive to use imported coal for 10% blending. The domestic coal, thus saved, would be allocated to those gencos/IPPs who have already commenced blending, the ministry added.

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