A letter from Coal Minister Pralhad Joshi to chief ministers of states, requesting them not to import the fossil fuel, surfaced today. He requested them to requisition from the domestic supply of coal from state-owned Coal India Ltd (CIL), where there is no dearth of it.
A significant drop in power demand in the country due to the lockdown imposed to contain the fatal coronavirus disease (COVID) has led to the abundance of stock with the CIL. A source in the ministry said, “The coal minister had written to chief ministers of all the states a few days ago, asking them to not import coal.”
The country’s coal import increased marginally by 3.2% to 242.97 MT in the just-concluded fiscal 2019-20.
Government boosters for coal
In a bid to give a boost to coal demand hit by the ongoing lockdown, the government has announced a slew of measures like increased coal supply for linkage consumers. Joshi, for one, announced several relief measures for consumers of CIL, including the power sector, in the wake of the situation arising from coronavirus.
Further, the ministry approved relaxation in quantity of coal for linkage consumers. “Now, they can lift quantities even beyond their contracted quantity, if coal is available at the mines,” the ministry had said.
The ministry announced that no performance incentive should be levied on power consumers if CIL supplied more than the upper limit of the Fuel Supply Agreement (FSA). “The mark-up over the notified price for purpose of the base price in auctions to Non-Regulated Sector (NRS) has also been reduced,” the ministry had said. Now, the auctions will be held at the notified price.
“These measures are expected to give boost to coal demand in the present situation. We will review the situation in September 2020 for further continuance,” Joshi had said.
About 80% of India’s domestic coal production comes from CIL. The state-owned company recorded an all-time high coal output of 84.36 million tonnes (MTs) during March 2020, registering a 6.5% growth compared to 79.19 MTs it produced in March FY’19.
“In producing 3.85 MTs on 30 March, CIL has set up a new record for the highest ever production in a day since inception,” an official statement said.
The company closed fiscal 2019-20 with annual coal production of 602.14 MTs. Rebounding with gusto in the last quarter of FY’20, CIL clocked a robust 9.9 per cent production growth compared to the same quarter of 2018-19.
The Maharatna firm produced 213.71 MTs of coal during January-March 2020, an increase of 19.26 MTs in volume terms as compared to 194.45 MTs that the company produced in the fourth quarter of FY’19. “After the company’s production was severely impeded on account of excess and prolonged monsoon during the first half of the fiscal, we could recover much of the lost ground in the second half,” an official of the company had said, adding that CIL “produced 120.28 MTs more coal in H2 than it did in H1”.