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Coal consumers body seeks renewal of rake-based supply to non-power sector


December 27, 2022

Coal consumers body seeks renewal of rake-based supply to non-power sector

The Coal Consumers Association of India (CCAI) has made a plea to the government to resume rake-based supplies to the non-power sector in a bid to maintain cost competitiveness and sustain operations.

Despite Coal India’s production and despatches improving considerably this year, the supply of dry fuel to the non-power sector continues to languish below optimal levels amidst spiralling costs.

This situation has led to the non-power sector relying on road-based supplies, in turn leading to soaring costs for its constituent industries. Converting rail quantities to road offtake often attracts higher premiums than those already paid to Coal India Ltd (CIL) for rake-based supplies, CCAI said.

“…converting rail quantity to road offtake may often lead to a higher premium for coal which may be more than the premium paid to CIL for supply via rail mode. This is invariably adding the additional burden of cost on the NRS (non-regulated sector) consumers on top of the higher transportation cost of coal via road,” CCAI said in a letter this month to the Coal ministry.

As CIL’s production and overall despatch have grown exponentially and are on an upward trend while the country’s peak demand has comparatively reduced in recent weeks due to the fall in temperature, the government’s intervention is requested so that the number of rake supplied to the NRS consumers may be increased at the earliest possible, the letter said.

“Also in mode agnostic single window auction, the price of coal is going to be the same for both rail mode and road mode. Linkage auction is also a type of e-auction of coal and CIL subsidiaries are supplying a much less number of rakes than the allotted quantity by rail to NRS.

Considering the plight of industries and their CPP units, in line with the modalities of mode-agnostic single-window auction, rail-to-road conversion may be considered without change in premium so that the consumers do not have to bear the additional expenditure without any fault on their part,” it said.

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