Power sector’s dues to Coal India up 8 per cent m-o-m in May

Rishi Ranjan Kala | Updated on: Jun 16, 2022

Coal Ministry says CIL has increased coal supply despite high outstanding dues from the State utilities

The outstanding dues of state-run Coal India (CIL) from the power sector rose by 8 per cent on a month-on-month (m-o-m) basis to ₹13,825.20 crore at the end of May from ₹12,819.09 crore in April.

DAM Capital Advisors Senior VP Mohit Kumar said the dues have been building up because State utilities are not paying on time. He pointed out that most of the private Discoms, private Gencos and central Gencos pay on time. “Payments with respect to Discoms is also concerning. In the context of dues increasing in May, it can be seen that the off-take of coal has improved and higher off-take means higher bills,” he explained.

During May, CIL’s coal production rose by 30 per cent y-o-y to 54.72 million tonnes (mt), while the cumulative output for April and May stood at 108.19 mt, which is 29 per cent higher on an annual basis.

With the prevailing shortage of coal in the country, largely on account of significant decline in imports and higher demand for electricity, coal off-take rose 11.3 per cent y-o-y to 61.24 mt, whereas in April and May, the total off-take grew 8.7 per cent to 118.70 mt on an annual basis.

The despatch of the key commodity by the country’s largest coal miner also was higher by 17.2 per cent y-o-y to 52.14 mt last month. During April and May, the cumulative despatch of the dry fuel rose 16.3 per cent y-o-y to 101.82 mt.

CIL has not raised prices since December 2020

CIL has not only ensured continuous supply of coal to meet the increased demand, but also maintained a constant cheaper price. In December, 2020, the price of imported coal (G8 grade) was around ₹4,200 per tonne, which rose to around ₹13,715 a tonne in April 2022. Against this, the price at which CIL is supplying coal is ₹1,475 tonne. This price is constant from December 2020, till date, Coal Ministry said.

CIL’s average cost of production is ₹1,310.88 per tonne.

Centre increased coal supply despite dues

Coal Ministry in a statement on Wednesday said, “CIL has been supplying sufficient coal to the State Gencos with an increasing year on year trend in quantity supplied. If we look at the coal supplied to the State Gencos in FY22 in comparison to the previous year, there has been increased supply. The coal supply to State Gencos has increased despite more than ₹13,000 crore of outstanding dues from the Gencos as on March 31, 2022.”

Coal supplied to APGENCO in FY21 was 11.25 mt, which was increased in FY22 despite the outstanding dues from APGENCO of ₹943 crore. Similarly, coal supplied to MAHAGENCO increased from 33 mt in FY21 to 37.13 mt in FY22. MAHAGENGO has outstanding payment of almost ₹2,500 crore against the coal supplied.

Rajasthan’s outstanding payment stood at ₹407 crore. At the same time, the coal supplied to Rajasthan’s RRVUNL was 5.19 mt in FY21 and it was increased to 9.49 mt in FY22, an increase of almost 50 per cent. In Tamil Nadu, 10.76 mt coal was supplied in FY21, and 17.36 mt in FY22. Tamil Nadu has dues of ₹893 crore.

Dues declined in FY22

The FY22 began with the power sector’s dues declining by 4 per cent to ₹20,837.62 crore at the end of April 2021 compared to March. During FY22, the dues declined consistently.

They fell from the April 2021 numbers to ₹16,028.41 crore at the end of the first half of FY22 in September 2021. The dues at the end of October fell to ₹14,598.58 crore after which they rose to ₹15,243.36 crore in November 2021. They declined consistently during December 2021 (₹15,088.42 crore), January 2022 (₹15,097.01 crore), February (₹15,037.32 crore) and March (₹12,272.41crore).

The lowest dues in the past several years were recorded at the end of March 2019 at ₹8,435.19 crore. 

Published on June 16, 2022
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