India asks importers for more coal to tackle heat wave

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NEW DELHI (BLOOMBERG) – India’s power ministry called on coal importers to ensure supplies as the country increasingly relies on the fuel to stem power blackouts, according to people familiar with the matter.

In a meeting with suppliers, ministry officials said they would help with obstacles such as late payments from provincial power plants, said the people, who asked not to be identified as they aren’t authorised to speak to the press.

The ministry has asked generators to import a total of about 19 million tonnes during the three months to June so they have enough reserves before the rainy season slows supplies.

India has seen an unprecedented demand for coal this summer, as soaring temperatures and industrial activity spurred electricity demand. That has pressured domestic coal supply infrastructure, forcing the country to turn to imports of the fuel and ditch previous efforts to slow overseas purchases.

The power ministry also plans to meet port and rail officials to ensure the imported coal reaches the plants smoothly, instead of being held up at transport terminals for weeks.

The ministry’s press office didn’t immediately respond to an email seeking comment.

Despite repeated calls from the federal government, generation plants, mainly owned by provincial governments, have been slow to place orders.

The biggest impediment is high prices that have shot up after the start of Russia’s war in Ukraine. Asian benchmark Newcastle coal futures have advanced more than 150 per cent this year.

The sliding rupee is not helping imports either. The Indian currency tumbled to a record low on Thursday (May 12), making imports more expensive.

Time is short too. From publishing tenders to having the coal delivered at the plant gate can take several weeks.

“Given the prevailing demand situation and logistical bottlenecks, pre-monsoon stocking up at the power plants is not happening,” according to Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu. “The time is running out before onset of the monsoon.”

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