Coal supply by CIL to CPPs, cement sector drops in May

The coal dispatch by state-owned CIL to captive power plants and sectors like cement registered a decline in May as compared to the year-ago month.

While the fuel supply by Coal India Ltd (CIL) to captive power plants dropped 39.74 percent in May 2022 over the year-ago period, dispatch to the cement sector declined 16.74 percent, according to the latest government data.

The coal supply by the PSU to the sponge sector also dropped 8.74 percent year-on-year in May.

However, supply to the steel sector went up by 67.83 percent and to the power, the sector increased by 19.48 percent last month, over May 2021.

In the wake of the short supply of coal to the non-regulated sector, industry bodies had earlier sought Prime Minister Narendra Modi's intervention in the matter, stating that industries are compelled to purchase power from exchanges at higher rates due to increased demand.

Reeling under the crisis on account of continued coal shortage, a major segment of the manufacturing sector, MSMEs, and captive power plant-based industry had jointly submitted a representation to the prime minister through a group of 10 industry associations.

According to the representation, dispatches of coal to sectors like captive power plants (CPPs), steel, cement, and sponge iron have been reduced by up to 32 percent in the current fiscal year.

The situation has aggravated to a level that may compel many industries to cut production or force closure. Such impediments in coal procurement may adversely impact the manufacturing sector which would in turn trickle down to the common people of the country.

If an equitable supply of coal between power and non-power sectors had been achieved during the January-March period, the coal stock situation at the power-end across sectors would have been much improved ahead of the summer, and the load on power utilities could have been reduced by generation from captive power plant units, the representation had pointed out.