India has called on its provinces to increase coal exports over the next three years to build a list of goods and meet demand, four sources told Reuters, a move that will benefit global oil prices, which are already rising due to the Ukrainian war.
The decision to boost imports underscores India’s fuel crisis as coal resources are at a very low pre-summer level in at least nine years and electricity demand appears to be rising rapidly at almost forty years. India, the world’s second-largest importer of coal, could increase global demand by 2025, as Energy Minister R K Singh sets a long-term line of state pressure to boost imports that has been seen as a temporary measure so far.
“Provinces have been asked to continue importing because private companies will take until early 2025 to produce a large-scale production,” a power department official who attended Singh’s meeting with state officials on Tuesday. In addition, the state-owned railway network is experiencing a shortage of locomotives, adds the official. Sources, two government officials who attended the meeting and two officials from the electricity department, declined to be named, as the matter is confidential. .
At the meeting, provinces were asked to sign long-term contracts to ensure the availability of goods and services at low prices, as well as the purchase of railway vehicles to resolve transportation problems, said a department official who was not immediately available for comment. High-value coal purchases could benefit miners such as Indonesia’s Adaro Energy Australia’s Whitehaven Coal Ltd and India’s largest coal trader, Adani Enterprises, whose controversial Carmichael mine in Australia has started producing coal this year.
But global oil prices will put pressure on India’s debt-carrying resources, threatening to add to their prices. Global prices have risen sharply due to fears of a drop in supplies after the European Commission decided to ban the purchase of coal in Russia following its Ukraine invasion, which Moscow describes ” special military service “. India, which has a long-standing policy of reducing coal exports, said in December there should be no imports other than the most important ones.
In March, the government said it had “achieved a sharp decline in imports without an increase in demand for electricity,” a decline caused by major changes. “Last year they told us to reduce imports,” said one of the government officials at a meeting on Tuesday. This is a confusing, mixed signal. “The minister’s remarks to the country’s authorities include a directive, as New Delhi strongly controls the exit and distribution of coal at home.
Although the energy-hungry country has pledged internationally to gradually cut off petrol consumption, it has said it will not cut off coal-fired power plants anytime soon, as they provide cheaper electricity. India is facing a shortage of coal despite government-produced production using Coal India. As the world’s largest coal mine, it produces 80% of Indian Railways. Indian Railways has struggled to lift goods, as the list of resources is dwindling.
READ ALSO : Myanmar’s Suu Kyi has been handed to five years in prison for the crime
