Consumers compelled to buy coal at high prices to keep plants running: CCAI

‘Unprecedented’ high levels making it unviable for non-regulated sector consumers to book supplies’

The Coal Consumers' Association of India (CCAI) sought the government's intervention to provide ailing industries a new lease of life, while expressing concerns over consumers being compelled to buy coal at high prices just to keep their plants running.

The statement comes amid certain parts of the country witnessing power outages in the wake of fuel shortages.

"The average bid price of coal in a recently conducted spot e-auction by MCL (Mahanadi Coalfields Ltd) rose as high as 800% above the notified price.

"It is evident that some of MCL's valuable customers are compelled to procure coal at such high premiums only for sustenance of their respective plants while many industries had to take a decision to be out of league in this auction due to soaring bid prices," CCAI said in a recent letter to Coal Minister Pralhad Joshi.

MCL is a subsidiary of Coal India Ltd.

While the allocated quantity as per the fuel supply pact was not being supplied to industries, coal companies had been successfully conducting spot e-auctions where prices had scaled up to ‘unprecedented’ high levels since March, making it ‘unviable’ for many non-regulated sector (NRS) consumers to book the required quantity, the CCAI said.

The country's industrial sector has been going through a serious crisis due to lack of coal supply especially via rail mode since last September. This crisis has further aggravated over the last few months.