If coal prices do not rise, power supply will be disrupted in summer

MUMBAI: Coal production could be cut if coal prices do not rise, warns Coal India. Any cut in coal production could affect the country's power supply.

In addition to the increase in wages, the company claims that higher consumption of diesel in the equipment used to extract coal from the mine has resulted in higher overall cost of obtaining coal. It is difficult to operate some of its units without raising the price of coal, said Pramod Agarwal, chairman of the company, in an interview with analysts.

Any increase in coal prices needs to be included in long-term agreements and this must be backed by the government. Rising coal prices could have an impact on the country's inflation and overall economy.

About 90% of the total electricity generated in the country is coal based. In view of this fact, the government is forcing Coal India to ensure that supply is maintained.

With the decline in coal production from the mines, the industrial consumers of coal, apart from the power generating companies, are complaining that they are getting less supply of coal. There were also reports of this being presented to the Prime Minister.

They now have only 3% of the stock of coal at the power plants as of April 2020. As summer approaches, any cut in coal production could lead to a power crisis in the country.

It is imperative that prices rise immediately. It is essential for Coal India. Failure to do so would affect coal production in India, a report quoted Agarwal as saying.