A recent decision by the Indian Railways could end-up pushing up power tariffs in the country. Indian Railways has decided to levy coal terminal surcharge at the loading as well as unloading terminals for power companies, located beyond 100 km from coal mines.
The increased cost, as a result of levy of the surcharge, cannot be entirely passed on to consumers, but will have to be borne by the producers. Experts opine that nothing beyond 15% of the increased cost could be passed on to consumers, to compound to the already tight margins of power producers in the country.
The levy of the surcharge is likely to hit the private power producers rather than the public ones, as most of the former ones are located beyond 100 km from the country’s coal mines.
Voicing against the levy of the surcharge, the Secretary General of the Coal Consumers’ Association of India is heard to have said that there seems to be no rationale in the levy of the surcharge as the loading and unloading terminals are mostly equipped and manned by buyers.
On the other side, the levy of the surcharge could raise electricity tariffs by 8 paisa per unit.
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