Coal Ministry Looking for Environment Tax on Pet coke

Heavy Imports of Pet coke in India on the backdrop of additional tax gives unfair price advantage to buyers.

Indian Coal ministry suggested Coal India (CIL) to levy an environmental tax on Pet coke to maintain coal cost competitiveness in the market. The coal ministry’s recommendations are based on a presentation from CIL noted that the lack of a tax on Pet coke gives it an unfair price advantage.

Pet coke, a refinery fuel is cheaper than other coal grades but more polluting than the other carbon fuel. Currently, the fuel is importing heavily in India without any additional tax levy, although the Indian government had doubled the clean-environment tax on coal this year to INR 400/MT, on the concern of climate control.

Pet coke, a big substitute for South African coal is largely used in Indian Cement and sponge unites. Constantly falling Pet coke offers in the global market resulted to increase in shipment to India as average imports reached at about 1 MnT per month. Indian imported about 1.5 MnT pet coke in Jul’16.

Meanwhile, sudden rise in demand also prompted Indian manufacturers to increase their pet coke production to cater the domestic need largely.

A tax may crimp demand for Pet coke and raise costs for users, who may be forced to switch back to coal.