The government will not scale down Coal India’s output target of 710 million tonnes (MT) for the ongoing fiscal even though the country has more than enough stock of the dry fuel amid subdued power demand due to the coronavirus lockdown, as per Government officials.
CIL’s pithead stock was at 74 MT as on March 31, the highest ever, he added. In spite of abundance of fuel stock and subdued demand by the power sector, the company will keep producing coal. There is expectation that the demand will pick up ahead of summer. Moreover, during monsoons there is less production of coal, so this is the time when the maximum production can happen.
Since there is not much coal demand from the power sector — as it already has fuel stock of 28 days — CIL is planning to divert the fuel supply to the other sectors like cement and sponge iron. Coal Minister Pralhad Joshi had recently asked states not to import coal and instead take supply from state-owned CIL, which has the fossil fuel in abundance.
In a bid to spur coal demand hit by the ongoing lockdown, the government had recently announced a slew of measures like increased dry fuel supply for linkage consumers.
Joshi had also announced several relief measures for CIL consumers, including the power sector, in the wake of the situation arising from the pandemic.
The coal ministry also announced that no performance incentive shall be levied on power consumers if CIL supplies more than the upper limit of Fuel Supply Agreement (FSA). About 80 per cent of India’s domestic coal production comes from CIL. The company closed fiscal 2019-20 with coal production of 602.14 MT, against the target of 660 MT.