India asks utilities to import 6% of their coal for nine months

FILE PHOTO: A worker watches as a loader unloads coal at a yard on the outskirts of Ahmedabad

By Sarita Chaganti Singh

NEW DELHI (Reuters) -India's power ministry has asked utilities to import 6% of their coal requirement until September, according to a letter seen by Reuters, warning that domestic supplies could be curtailed if import targets are not met.

Coal accounts for more than 70% of India's power generation, with coal-fired plants accounting for more than three quarters of India's use of the polluting fuel.

Estimated domestic coal supply of 392 million tonnes during the six months to the end of September is expected to fall short of demand by 24 million tonnes, according to the letter sent to heads of energy departments of states and managing directors of all utilities.

"Energy demand has increased sharply and it is expected to remain at increased level during first half of 2023/24," a power ministry official said in the letter.

The ministry's remarks to officials in the letter constitute a directive because New Delhi largely controls domestic output and distribution of coal.

India has a long-standing policy to trim imports of coal, but the country's power minister in April urged states to step up coal imports for the next three years to build up inventories and satisfy demand.

Although the energy hungry nation has made international commitments for a gradual cut in its use of the fuel, it has said it will not phase out coal-fired plants in the near future because they provide cheap electricity.

(Reporting by Sarita Chaganti SinghWriting by Sudarshan VaradhanEditing by David Goodman)