Rising fuel cost short-to-medium term constraint, says Sanjiv Goenka

The rapidly rising cost of fuel, owing to the Russia-Ukraine crisis and demand-supply factors, is a short-to medium-term constraint, CESC Chairman Sanjiv Goenka has said.

Goenka said in such a scenario, it is vital that power producers and distributors are able to expeditiously pass on purely the element of higher fuel cost through tariffs.

Unfortunately, while this forms a part of each power supply contract, we still see reluctance of state governments and regulators to give their assent in a timely manner.

This, in turn, negatively affects the financial results of power producers. I hope we will see considerably less of this reluctance in the years to come, he said in CESC’s annual report for 2021-22.