Power producers are refusing to buy imported coal on high price

“Coal stock piles at various ports
have reached record levels and are estimated to surpass the 11Mt mark”
paper reports says.  India is facing an acute fuel shortage, but Indian
power producers are refusing to buy imported coal or not willing to pay high price
for coal.

“Yes, currently, in all
Indian ports more than 10 million mt of imported coal  is piled up. The
reason for this is a lack of demand for imported coal. One may get wondered why
there is a lack of demand when there is a huge fuel and power shortage in
India,” an international senior coal trader said.

The lack of demand is due to variety of
reasons viz., ever increase in costs: the depreciation of the Indian rupee, the
recent drop in international coal prices, utilities not paying on time, increase
in logistical costs, each state invoking section 11 of electricity act
preventing the private developers to sell it to other deficient states, lack of
evacuation facilities are the main reasons to pile the imported coal at port
instead of power plant stock yard, another end-user explain in detail.

From the government, there are
numerous new levies like the additional counter veiling duty of 5%, railways
increasing the developments charges by 3%; busy season surcharge by 5% and
increasing the chargeable weight to carrying capacity plus 10MMT(increase in
dead freight) and imposing of clean energy CESS of Rs.50 pmt, are also
contributors of this situation, said another  trader. Due to above the
multiple reasons the lifting of stocks have adversely affected and stocks piled
up.

Source:
coalspot.com