Coastal power plants scale up coal imports, as freight, other imposts jack up local fuel prices

Coastal power plants in the southern and western India, being away from the Coal India (CIL) pit heads, are finding imported coal, especially shipments from Indonesia, far cheaper than domestic coal as high rail freight and assorted levies inflate the prices of the local variety. A power plant in Tamil Nadu, for instance, would pay Rs 4,350/tonne for CIL coal, but fork out just under `3,800/tonne for Indonesian coal of comparable energy content.

Alas, this is despite the CIL’s pit-head coal price for the (regulated) power sector being below Rs 1,000/tonne against the landed cost of Indonesian coal, which is hovering around $50/tonne (around Rs 3,700 at current exchange rate).